TEXMACO RAIL Chairmans Speech

The Chairman


Path Breaking Initiatives


We are witnessing phenomenal policy changes and initiatives in the third year of the present Indian government under Prime Minister Narendra Modi. Of these, India’s biggest transformational indirect tax reform would be the Goods and Services Tax (GST), which has been debated and stretched over some 17 years. Fortunately, there is a consensus between the Centre and the States, and the historic step of a ''''single'''' national tax GST is just days away. The omnibus GST will replace a maze of Central and State taxes and will enable India to function as one single economic unit without barriers, facilitating a seamless inter-state flow of trade and commerce.


Another key measure taken by the Govt. of India was ''''demonetisation'''' in November 2016, which, going forward, is expected to generate robust growth in the economy. Hopefully, there would be a great many opportunities emerging in the coming quarters following a series of reforms and initiatives announced in the Budget FY 2017-18. Besides, the improving industrial climate in West Bengal also augurs well for your Company''''s expansion and diversification programmes.


The Economy


It would be contextual to recall what The Economist had to say in a survey of the Indian economy in June 1991. It said, "Nowhere in the world is the gap between what might have been achieved and what has been achieved as great as it is in India." And come Modi Government, the acceleration of structural reforms has provided a strong sustained growth impetus in the country. The IMF expects India to cross 8% GDP growth in the next 3 years and remain the fastest growing large economy until 2022. It bears mention that India''''s growth rate is four times the average of any OECD country and twice the global average.


The macro-economic indicators, such as, fiscal deficit, inflation and Current Account Deficit are at stable and prudent levels. There is a surge in FDI, as India has emerged as one of the most promising global investment destinations. The opportunities are aplenty in India with the new initiatives, such as Make-in-India, Digital India, Start-up India, Smart Cities etc.


Further, a major initiative has been taken to spur development on India''''s 2500 km long East Coast Economic Corridor, in line with GoI''''s Act East Policy. India is also getting actively engaged to enhance trade relationships with BRICS countries, which constitute 43% of the world''''s population, 30% of the world''''s GDP and 17% share of the world''''s trade.


Rail Sector


The Railways Sector, in which your Company is a key player, holds a strategic position in India''''s freight transport infrastructure. It is admittedly cost-effective, environment friendly and more reliable, but despite these advantages, the modal share of the Indian Railways has not picked up commensurate with the growth of the country''''s economy. The two key reasons impeding the growth of freight traffic have been: network congestion and under-investment in Railways. Consequently, the requirement for wagons has been sluggish and has lately affected the Company''''s operations in the Wagon Division.


Your Company, therefore, took some significant steps to reinvent itself as a ‘total rail solution provider''''. From a position of vulnerability, being largely dependent on wagon manufacture, the Company has substantially broad-based its product range from the manufacture of freight cars to the service-driven EPC business of track laying, signaling, rail telecom and overhead electrification.


Expanding Network


The Ministry of Railways is seized of the situation, introduced a host of policy initiatives and committed massive investment to modernize rail infrastructure and boost of freight traffic. As against a spending RS,30,000 / RS,40,000 crore in a year in railway infrastructure, almost RS,3 lakhs crore has been invested in the last two-and-a-half years.


To address the problem of network congestion, the Eastern and Western


Dedicated Freight Corridors (DFCs) are being developed at a rapid pace and expected to be commissioned in December 2019. The DFCs will equip IR to run freight trains at 100 kmph with a substantial increase in pay load. This will bring about a quantum jump in rail transportation capacity while significantly reducing operating costs. The capacity augmentation of all freight routes is likely to be completed in the next two to three years.


The EPC Arms


Your Company''''s two recent acquisitions, Kalindee Rail Nirman (Engineers) Ltd. (Kalindee) and Bright Power Projects (India) Pvt. Ltd., the former being a major player in track work and signaling etc. and the latter in railway electrification (planned at 5000 km/year from current level of around 2000 km), hold a great promise for the future of your Company. These EPC arms have helped the Company in garnering unique credentials in the railway and metro infrastructure space.


Kalindee, after its major presence in the domestic market for decades, is now seeking to aggressively venture into the offshore railway business. It is focusing on projects funded under bilateral credit in neighboring countries like Bangladesh, Sri Lanka, Myanmar, and countries in the Middle East and Africa.


Challenges


Skill development is one of the major challenges facing the Indian economy. India is blessed with a young population, which constitutes its demographic dividend We need to leverage this potential. Necessary measures are required, however, to create enough jobs and the workers to be suitably trained and skilled to minimize a workforce-skill mismatch.


Human Capital and Core Values


While we are always striving for sustained growth and a profitable performance, we maintain high standards and transparent alignment in what we believe, say and do. To us, the challenge of growth is ''''Inclusiveness'''' and we consider the well-being of society at large with a keen desire to bring about positive change. We create a vision to dream and look beyond.


Corporate Governance guides the way we run our business in an evolving eco-environment through various CSR activities while maintaining accountability for all stake-holders. We lay a special emphasis on women''''s empowerment and are trying to touch their lives by enabling the economic independence.


We will continue to inspire more people to add to human welfare in all we do.


S.K. Poddar

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