DIRECTORS REPORT

Distinguished Shareholders  

The Directors of your company have immense pleasure in presenting the 42nd Annual Report of the company together with the audited Statement of Accounts and Auditors Report for the year ended 31st March, 2016.

FINANCIAL HIGHLIGHTS                                                                                                            

The financial performance of the Company for the year 2015-16 is given below:

                                                                                                                                                    (Rs.in Crore)

BUSINESS PERFORMANCE

During the year, company has achieved highest ever turnover of Rs 1294 crore as compared to previous years turnover of Rs 1166 crore, higher by 11%. The profit before tax is Rs 515 crore being higher by 13% as against Rs 456 crore of the previous year.

During the year, company was engaged in a number of prestigious domestic projects, which includes works for setting up a  FIAT  bogie frame manufacturing plant at Budge- Budge for  RCF- Kapurthala and a wagon manufacturing factory at Kulti, Modern Bus Terminal at Maltipatpur, Puri for the Orissa Government,  setting  up of M-15 Gas Turbine aggregate testing facilities for Indian Navy at INS Eksila, Visakhapatnam, Preliminary Engineering & Traffic Survey (PETS) of Future Corridors  for  DFCCIL, Independent Engineer Services for Development of Chennai Outer Ring Road in Tamilnadu for TNRDC, Project Advisory Services including Detailed Design & Report Preparation for Development of Six Lane Extra dosed Green Field Bridge project over River Ganga at Patna for Bihar State Road Development Corporation Ltd (BSRDCL), DPR for Construction of ROBs/Flyover at 6 locations for DDA, Consultancy for Bangalore Metro Phase-I and Delhi Metro Phase-III, Interim consultancy for Bangalore Metro Phase-II and Nagpur Metro Phase-I, Technical feasibility study & DPR for Metro Rail in Agra & Kanpur, DPR for MRTS/RRTS between Ahmedabad & Dholera, Feasibility study & DPR for Kochi Metro Phase II, Maintenance of Rolling Stock & workshop equipment of MGR system at various locations of NTPC like Rihand, Singrauli, Sipat, Talcher, Kahalgaon & Farakka, Project Management Consultancy services for (i) Central university at Pondicherry, Karnataka, Kerala, Gaya, Allahabad,  IIT at Kharagpur, NIT at Meghalaya (ii) National Automotive Testing and R&D Infrastructure Project (NATRIP) - Ministry of Heavy Industries (iii) Rail Infrastructure for DVC, NTPC, CIL and others at different locations and (iv) Construction of Integrated  check posts at Raxaul and Jogbani along Indo-Nepal border, at Agartala, Dawaki and Petrapole along Indo-Bangladesh border, Moreh along Indo - Myanmar border, engineering consultancy for expansion of Shimla airport, Pantnagar Airport, Greenfield Airports at Singrauli & Gwalior. ICPs at Petrapole commissioned and at Raxaul also nearly completed. During the year, RITES has taken up an important project at Vidisha on turnkey basis for manufacturing of traction alternators, which will be an import substitution product for the Indian Railways.

During the year, company was engaged in a number of prestigious international assignments in export, leasing and consultancy services which included contract for supply of 120 BG passenger coaches to Bangladesh Railway, leasing of locomotives to CFM, Mozambique for two different locations at Maputo and Beira and supply of  six MG diesel electric locomotives to Senegal.  RITES exported 40 BG passenger coaches to Bangladesh Railways during the Year 2015-16 and balance 80 coaches are planned for export during the year 2016-17.The fleet of 16 locomotives leased by RITES to CFM, Mozambique continued to operate throughout the year. Four MG diesel locomotives were also exported to Senegal during the year. RITES has also provided warranty maintenance and support services in Bangladesh, Myanmar and Sri Lanka during the year 2015-16, Consultancy services for supervision for up-gradation to paved road Standard of existing roads in Terai region of Nepal, services for development of 50 year National Transport Master Plan for Kenya and feasibility study for Mayumba-Mbigou New standard Gauge Railway line in Gabon.

During the year, the company has secured major export orders from Myanma Railway for supply of eighteen MG diesel electric locomotives and from Senegal for supply of six MG diesel electric locomotives.

OUTLOOK

Over the years, RITES, as one of the leading transport infrastructure Consulting Companies in Public Sector in the Country, has been playing a pivotal role in the development of transport and infrastructure sectors viz, Railways, Highways, Ports, Airports, Waterways, Ropeways, Urban Transport, Urban Engineering, Container Depots, Institutional Buildings, and Railway Electrification etc. RITES has eventually diversified into providing multidisciplinary services from concept to commissioning for efficient and economic implementation of the projects.

The Company continued to provide specialized, integrated services under single roof in transportation infrastructure sector and export packages for supply of locomotives, coaches, wagons, spare parts and modernization of workshops. The Company is expanding its reach by venturing into the business of wagon manufacturing and is also planning to develop potential business avenues in power sector including Green Energy etc. The company is also exploring business opportunities in captive railway systems in India through equity participation with other stakeholders, with the main focus on providing total transportation solution as against pure consultancy assignments. Business of offering shunting locomotives on wet lease including operation & maintenance continued to be well received by domestic Non- Railway clients. 33 locos have so far been put to service in India.

As a matter of diversification (i) RITES and the Indian Railways promoted a Joint Venture Company, Railway Energy Management Company Ltd. (REMCL) for renewable energy projects, bilateral purchases, power trading and energy efficiency projects etc. In a record time of 10 months, it has commissioned 26 MW Wind Mill in Jaisalmer and also concluded power procurement contracts for 1200 MW in different states (ii) RITES has completed setting up of the state-of-the-Art wagon factory, at Kulti, West Bengal as a 50:50 JVC between RITES and SAIL, a Make in India initiative of the Indian Railways. An assured Off-take Agreement has also been signed with Railways, arising out of the commitment made by the Ministry of Railways in the year 2010 regarding assured off-take order for manufacture of 1200 wagons/annum and rehabilitation of a minimum of 300 wagons/annum. (iii) Company has taken over turnkey works for construction and supply, installation and commissioning of Machinery & Plant for upgradation / modernization of Railway Workshops.

CAPITAL STRUCTURE

The Paidup share capital of the company remained at Rs 100 crore as against Authorised Share Capital of Rs 150 crore and the company has not issued equity share during the year under consideration. 

DIVIDEND

Your Directors have recommended final dividend of Rs 91.0 crore in addition to interim dividend of Rs 45 crore paid during the year 2015-16. The total dividend pay-out for the year will amount to Rs136 crore (i.e. Rs. 13.6 per share) which is 136 % of paid up share capital of the company.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from public during the year under review.

RESERVES

An amount of Rs. 175 crore is proposed to be transferred to General Reserve by appropriation from the profits of the Company for the year 2015-16.Reserves & Surplus will increase from Rs.1528 crore at end of the previous year to Rs 1703 crore as at 31st March, 2016.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

CONSERVATION OF ENERGY

As a consultancy organization, RITES is not a major energy consumer and hence our carbon emissions are minimum.  Yet, for the consultancy studies undertaken by RITES, it has been the practice to pursue the national goal of energy conservation and accordingly, suggestions are given to our clients for measures and methods to conserve energy.

I.          The steps taken or impact on conservation of energy;

In Gurgaon, RITES is housed in two large buildings (ROC-I&II) where energy saving measures have been implemented and energy audits conducted regularly. RITES has been awarded Gold LEED certification by Indian Green Building Council for one of its offices.  Real time air conditioning temperature is monitored and corrections are done to suit comfort of occupants. VFDs and VRF system have been installed for precise temperature control which in turn help to conserve energy. The neon signs installed in the premises are LED operated. All new lighting installations are filled with T5 or CF lamps.

II.         The Steps taken by the company for utilizing alternate source of energy;

For both the buildings, solar power panels have been mounted on roof tops to generate electricity from solar power. 

III.     The Capital investment on energy conservation equipments;

An expenditure of Rs. 9.0 lakh have been incurred towards installation of T5 light fittings in the new canteen for employees.

TECHNOLOGY ABSORPTION

I           The efforts made towards technology absorption:

Being a leading consultancy organization in the field of transportation, RITES keep itself abreast with the latest technology and knowhow in not only in the area of the transportation but also the technology and technological innovation that bring better efficiency and economic benefits to the sector. To achieve this, the company continuously strives to procure and absorb the best and the latest technological innovations in all the areas of its business by continuously updating its software and knowledge base by sponsoring and encouraging its experts to actively participate in national and international seminars and conferences, perusal of information and technological updates available on internet, study of periodicals, etc.

II          The benefits derived like product improvement, cost reduction, product development or import substitution:

Optimized and environment friendly rolling stock designs being developed by the company will benefit the sector in many ways such as weight reduction, reduced manufacturing cost, reduced track load density and track wear, increased speed, higher carrying capacity and lowered emission. This will also lead to reduced fuel consumption. This has helped the industry in developing rolling stock components by developing and standardizing their specification which were being imported so far

III         In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

a.    The details of technology imported;

         Not applicable

b.    The year of import

Not applicable.

c.    Whether the technology been fully absorbed

         Not applicable.

d.    If not fully absorbed, areas where absorption has not been taken place, and the reasons thereof: and

         Not applicable.

IV. The expenditure incurred on Research Development.

During the year RITES has undertaken the work of Design, Development and Procurement of Common Rail Electronic Direct Injection (CREDI) Fuel System for 16 Cylinder [3100 to 3300 HP] for Alco Engine to RDSO Technical Specification No. TS/ED/2015/79 for 15 loco sets based on technology developed by DUAP of Switzerland.  RITES has formed a consortium with DUAP.

Prototype development will include, design layout of injector, HP pump, common rails, all piping from pump to injectors and other system components for Alco engine. Process of prototype will include 1-D simulation (and if required 3-D simulation) for entire system of Alco engine with simulation software like AME-Sim and optimization of major functional parameters, detailed design of all system components. Engine performance will be tested on engine test bed at RDSO. The proven technology will be passed on to Indian Railways.

The cost of the Project expenses is being borne by the client.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Foreign Exchange earned and the Foreign Exchange outgo in terms of actual inflows/ outflows during the year is as under:

Total foreign exchange earnings during the year under review were Rs.233.45 crore (previous year Rs.188.69 crore) and foreign exchange outgo were Rs.13.43 crore (previous year Rs.13.48 crore) respectively. This resulted in net foreign exchange earnings of Rs 220.02 crore (previous year Rs 175.21 crore).  

PRESIDENTIAL DIRECTIVE

Presidential Directive received  from Ministry of Railways vide letter dated 29.04.2016 regarding payment of dividend  for the financial year 2015-16 at the rate of 40% of Profit After Tax (Inclusive of interim Dividend of 2015-16).

VIGILANCE

During the financial year 2015-16 impetus was on preventive vigilance. Accordingly, surprise checks were taken up at manufacturers premises at Mumbai, Hyderabad, Kolkata, Faridabad, Ghaziabad, Chandigarh, Kanpur Varanasi, Lucknow and Jalandhar. CTE type checks were carried out at Maltipatpur (Orissa) Dudhichua Yard / Sonebhadra (UP), Government Engineering College, Karwar (Karnataka), Railway siding near Pandaveswar (West Bengal), MPPGCL/ Khandwa and CDFD works at Uppal / Hyderabad (Andhra Pradesh). As a result of CTE type inspections carried out by RITES, recoveries amounting to Rs. 24.96 lakhs have been effected during 2015-16. Presentation on common irregularities during execution of projects and workshop on relevance of hindrance register in grant of extension of time and extension of milestones was organised during Vigilance Awareness Week. Further, a Hand Book of vigilance case studies based on various CTE type checks and various cases of inspection of materials was released during Vigilance Awareness Week. RITES Vigilance cell carried out 29 surprise checks which included examination of tenders for award of sub-consultancy works.

To ensure prompt observance of conduct rules, checks on annual property returns, gifts accepted by the officials was kept. During the year 2015-16, 261 Annual Property Returns were scrutinized. In line with central vigilance Commission Guideline on leveraging of technology, a close watch was kept on the tenders and other details uploaded on RITES website. Details of all assets being issued to individual staff are also being updated regularly on employee portal.

Speedy processing of vigilance cases at all stages has been carried out, especially with regard to cases requiring consultation with CVC. A total of 67 complaint cases and 12 cases of departmental inquiry (CVC and non-CVC) have been disposed off during 2015-16. Further, vigilance cell received 57 complaints and submitted 79 investigation reports during 2015-16.

In addition to above activities interactive sessions on common irregularities during project implementation and material inspection were held by CVO with officials of Regional project offices and Inspection units at Kolkata, Chennai, Delhi and Mumbai.

Contracts OR ARRANGEMENTS with Related Parties under Section 188 (1) of THE Companies Act, 2013

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis.

Your Directors draw attention of the members to Note 2.32 to the financial statement which sets our related party disclosures. (The details of contracts entered into with related parties in prescribed format AOC-2 is placed at Annexure I)

PARTICULARS OF   LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of loans, guarantees given or investments made along with the purpose for which the loan is proposed to be utilized by the recipients are provided in the standalone financial statement (Please refer to Note 2.09, 2.11 & 2.20 to the standalone financial statement).

RISK MANAGEMENT UNDER SECTION 134(3) (N) OF COMPANIES ACT, 2013 

Board of Directors in their meeting held in May, 2011 had re-constituted the Risk Management Committee comprising of Shri Debidas Datta, Independent Director (Chairman), Dr. Vinayshil Gautam, Independent Director, Shri Vinod Somani, Independent Director, Director Finance and Director Technical as members. However, since the term of two Independent Directors viz Shri Vinod Somani, (Chairman) and Dr. Vinayshil Gautam, (member) was completed on 28th December, 2013 and the term of the third Independent Director i.e Shri Debidas Datta got completed on 24.06.2014. However, with the appointment of Independent Directors on the Board of the Company w.e.f 01.04.2016, Board of Directors in their 221st meeting held on 3rd June, 2016 constituted Risk Management Committee comprising of Shri Anil Kumar Goel, Independent Director, as Chairman, Shri R.S Kochak, Govt. Nominee Director, Shri A.P. Dwivedi, Govt. Nominee Director and Shri Ajay Kumar Gaur, Director Finance, as members.

Execution of foreign projects gives rise to currency variation risk.  For this purpose, company regularly monitors exchange fluctuations to mitigate this risk, as company has a sound currency risk management policy in place.  Policy covers various aspects of currency risk management, benchmarking, hedging and risk appetite, permissible Instruments, hedging policy, structure of the risk management committee and treasury group, reporting procedures etc.

In this respect Company has also constituted Treasury Risk Management Committee and an assistance is also taken from an external consultant/economist as and when required.

PROPAGATION OF HINDI

In pursuance of Official Language policy of the Govt. of India (Ministry of Home Affairs, Official Language department) and the directions received from Railway Board from time to time, all round efforts were made to accelerate the progressive use of Hindi in official work of the Company.  Important documents, such as Annual Report, MOU, Circulars, Office Orders and Minutes of various meetings were prepared and issued in bilingual form. Rajbhasha Fortnight was organized smoothly from 1st September to 15th September, 2015. 'HINDI DIWAS' message by CMD/RITES was issued timely to all the officials of RITES Located all over India. Competitions like; Noting and Drafting, Essay, Elocution and Typing on Computer were organized during this period and Hindi workshop, Table Training and inspections of different departments were also conducted. 24 winners of different competitions were awarded cash award and certificates by CMD/RITES.

During the year, 11 inspections regarding Progressive use of Hindi and 15 workshops in different Departments/Offices were conducted. 50% Hindi books were purchased in the library. The quarterly meetings of Official Language Implementation Committee were held regularly in which progress of various items of Annual Programme of the Official Language Department, Ministry of Home Affairs were discussed and reviewed. Representative of RITES also participated in OLIC, Railway Board and TOLIC meetings regularly that facilitated the implementation of Official Language. 

During the inspection of Project Office, Mumbai on 05.10.2015 by Parliament Committee on Official Language, Honble members expressed their satisfaction over the progressive use of Hindi in  RITES. The Convener of the Parliament Committee on Official Language also appreciated the excellent coordination work done by the RITES team.  

MEMORANDUM OF UNDERSTANDING

The company meets parameters for Excellent rating in its performance evaluation under the MOU signed with the Ministry of Railways for the year under consideration (2015-16). However, communication from DPE in this regard is expected in due course.

SCHEDULED CASTE, SCHEDULED TRIBES AND OTHER BACKWARD CLASSES

The company continued to give utmost importance to implementation of the policies and directives of the Government of India in matters relating to reservations in employment for candidates belonging to SC/ST/OBC and differently abled categories. During the year 2015-16, 99 employees have been inducted against regular post, out of which 53 belong to SC/ST/OBC/differently abled Categories. Similarly during the year 2015-16, 155 employees were inducted against contractual posts, out of which 79 belong to SC/ST/OBC/ differently abled categories. 

ISO 9001-2008 CERTIFICATION

To ensure quality in its operations, the Company maintains an Excellent Quality Management System which conforms to ISO 9001:2008 and is certified by NVTQC (under ANAB accreditation). The certification covers all the activities and Divisions of the Company.

Also, RITES is empanelled with BEE as a Grade I Energy Service Company (ESCO). This grading indicates Very High ability of RITES to carry out energy efficiency audits and implement the energy saving projects in ESCO Mode.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS

Report on Corporate Governance and Management Discussion and Analysis containing Division-wise Performance forms an integral part of the Directors Report and have been placed at Annexure A & B respectively. 

EXTRACT OF THE ANNUAL RETURN AS PER   SECTION 92 (3) OF  THE COMPANIES ACT, 2013 HAS BEEN PLACED AT Annexure -II

 PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURE

There is no employee in the company falling under the category of employee required to be reported under the provisions of Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

FORMAL ANNUAL EVALUATION OF DIRECTORS UNDER SECTION 134 (3) (p) OF THE COMPANIES ACT, 2013

Formal Annual evaluation of Chairman & Managing Director and Directors, being a Govt. Company are done by Administrative Ministry.  (Further, as per Notification issued by Ministry of Corporate Affairs dated 5/06/2015, the provisions of the said section shall not apply to Govt Company , in case the Directors are evaluated by the Ministry or Department of the Central Govt etc)

DECLARATION BY AN INDEPENDENT DIRECTOR(S) UNDER SECTION 149(6) OF COMPANIES ACT 2013

As per Notification issued by Ministry of Corporate Affairs dated 5/06/2015, the provisions of the said section shall not apply to Govt Company.

BOARD OF DIRECTORS AND NUMBER OF MEETINGS OF THE BOARD

The Board of the Company comprises of 9 Directors viz 4 functional Directors including Chairman & Managing Director, two Government Nominee Directors and 3 Independent Non-Official Directors. The composition of the Board is in consonance with the Guidelines issued by DPE. As on 31st March, 2016, Company has six (6) Directors including four Functional Directors and two Government Nominee Directors. The Board met seven (7) times during the year 2015-16.

The Ministry of Railways vide letter dt 01.04.2016 have conveyed the appointment of following as Independent Director on the Board of the Company:

1. Dr. Vidya Rajiv Yeravdekar

2. Shri Anil Kumar Goel

3. Shri Satish Sareen

Shri R.S Kochak, Additional Member (PU), Railway Board has joined the Board of the Company as Government Nominee Director w.e.f 07.09.2015.

The following Directors held office during the year:

Whole-time Directors

Shri Rajeev Mehrotra                      Chairman and Managing Director

Shri Arbind Kumar                           Director Projects

Shri Ajay Kumar Gaur                     Director Finance

Shri S.B.Malik                                   Director Technical

Government Nominee Directors

Shri Arvind Khare                            Director (upto 30/04/2015)

Shri R.S. Kochak                             Director (from 07/09/2015)

Shri A.P. Dwivedi                             Director         

KEY MANAGERIAL PERSONNEL (KMP) (section 203 of the companies act, 2013)

Shri Rajeev Mehrotra                      Chairman and Managing Director (CEO)

Shri Arbind Kumar                           Director Projects

Shri Ajay Kumar Gaur                     Director Finance (CFO)

Shri S.B.Malik                                   Director Technical

Shri.PT.Mittal                                    Company Secretary & GM (Legal)

AUDIT COMMITTEE OF DIRECTORS

The Company had Audit Committee with Independent Directors forming majority. However, the term of two Independent Directors got completed on 28th December, 2013 and the term of the third Independent Director got completed on 24.06.2014.

Thereafter, Board of Directors from time to time had re-constituted Audit Committee with Govt Nominee Director forming majority with the condition that the Committee will be re-constituted, once the Independent Directors are in position.

The Audit Committee was last constituted by Board of Directors in their 219th meeting held on 8th January, 2016 with Shri R.S Kochak, Government Nominee Director (Chairman), Shri A.P Dwivedi, Government Nominee Director and Shri S.B Malik, Director Technical as members with the condition that the Committee will be re-constituted, once the Independent Directors are in position.

The Audit Committee met once during the year 2015-16.

With the appointment of Independent Directors on the Board of the Company w.e.f 01.04.2016, Board of Directors in their 221st meeting held on 3rd June, 2016 constituted Audit Committee comprising of Shri Anil Kumar Goel, Independent Director as Chairman, Dr. Vidya Rajiv Yeravdekar, Independent Director, Shri Satish Sareen, Independent Director, and Shri Arbind Kumar, Director Projects as members.

NOMINATION AND REMUNERATION COMMITTEE (sECTION 178 OF THE COMPANIES ACT 2013)

RITES, being a Government Company, its Directors are appointed by the President of India through Ministry of Railways, draw remuneration as determined by the Government and as per the terms and conditions of their appointment and as amended from time to time.

As per Guidelines on Corporate Governance for CPSEs 2010 issued by DPE in May, 2010, each CPSE is required to constitute a Remuneration Committee comprising of atleast three Directors, all of whom should be Part-time Directors (i.e Nominee Directors or Independent Directors). The Committee should be headed by an Independent Director. Remuneration Committee will decide the annual bonus/variable pay pool and policy for its distribution across the executives and non unionized supervisors, within the prescribed limits.

In accordance of these guidelines, the Board of Directors in their meeting held in October, 2011, re-constituted Remuneration Committee comprising of Dr. Vinayshil Gautam, Independent Director (Chairman), Shri Vinod Somani, Independent Director and Shri Debidas Datta, Independent Director as members.

The term of two Independent Directors viz Dr. Vinayshil Gautam (Chairman) and Shri Vinod Somani, (member) was completed on 28th December, 2013. The term of the third Independent Director i.e Shri Debidas Datta got completed on 24.06.2014. Thereafter, the Remuneration Committee was not in position.

Further, as per Section 178 of Companies Act, 2013 & Rule 6 of {Companies (Meetings of Board & its Powers)} Rules, 2014, Company is required to constitute a Nomination & Remuneration committee, who shall identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every directors performance. The Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.

However, as per Notification dt 5th June, 2015 issued by Ministry of Corporate Affairs, the provision of Section 178 shall not apply to Government Company except with regard to appointment of Senior Management & Other employees.

The expression senior management means personnel of the company who are members of its core management team excluding Board of Directors comprising all members of management one level below the executive directors, including the functional heads.

As per rule 2(k) of the Companies (Specification of definitions details) Rules, 2014 Executive Director means a whole time director which includes Director in the whole time employment of the Company as defined in clause (94) of section 2 of the Act.

In view of the same, with the appointment of Independent Directors on the Board of the Company w.e.f 01.04.2016, Board of Directors in their 221st meeting held on 3rd June, 2016 constituted Nomination and Remuneration Committee comprising of Shri Satish Sareen, Independent Director as Chairman, Dr. Vidya Rajiv Yeravdekar, Independent Director, Shri Anil Kumar Goel, Independent Director and Shri R.S. Kochak, Government Nominee Director, RITES as members. The said committee will also decide the annual bonus/variable pay pool and policy for its distribution across the executives and non unionized supervisors, within the prescribed limits as was being earlier decided by Remuneration Committee

DIRECTORS RESPONSIBILITY STATEMENT UNDER THE COMPANIES ACT, 2013

In pursuance of Section 134 (5) of the Companies Act, 2013, The Director hereby confirms that:

(a)     In the preparation of the annual accounts the applicable accounting standards have been followed and there is no material departure from the same.

(b)     The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that 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)     The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d)     The Directors have prepared the annual accounts on a going concern basis; and

(e)     The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively and

(f)      The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE COMPANIES

 A report on the performance and financial position of each subsidiaries, associates and Joint   Ventures companies as per the provisions of Section 129 (3) of the Companies Act, 2013 in prescribed format AOC-1 is provided as Annexure to the consolidated financial statements and hence not repeated here for sake of brevity.  

KNOWLEDGE MANAGEMENT SYSTEM

Knowledge Management has been established in RITES in order to identify, capture, evaluate, retrieve and share enterprise information.  The system consolidates important information of its experts and projects for being available at a glance to SBU Heads, Projects Leaders and employees / experts.  Management & Project Leaders get ready information of experts in various job roles & specializations, Projects in various sectors & disciplines, thus reducing effort & helping them in Business Development process.

During the year 2015-16, Knowledge Management System has been made available in SAP ERP of RITES in which the details of RITES experts is stored which can be retrieved in terms of their qualifications, number of years of expertise, sectors and sub-sectors, projects handled etc.  The projects executed by various departments of RITES in different areas of expertise / sectors is also captured in the SAP ERP system.

ENVIRONMENTAL PROTECTION

The company is in consultancy services and is operating from various offices in India and abroad which have no significant impact on environment. Further, in rendering consultancy to its clients, it ensures that rules pertaining to the environmental protection are being followed in their projects.

RITES has installed Sewerage Treatment Plants (STPs) in both the office buildings at Gurgaon and the waste water is reused for horticulture. RITES has installed rain water harvesting system to recharge the ground water. All electronic waste is disposed off through authorised recyclers. Majority of the petrol vehicles owned by the Company are CNG operated. Periodic inspections are carried out to ensure continued compliance of all relevant environmental rules.

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY 

Corporate Social Responsibility and Sustainability policy is our commitment to operate in economically, socially and environmentally sustainable manner that is transparent and ethical. It encourages engagement with the stakeholders in determining their needs and expectations. The stakeholders include employees, shareholders, investors, customers, clients, business associates, civil society groups, Centre/State/local government, communities, environment and society at large. A total of Rs. 8.28 crore was spent during 201516. Good image of RITES has been generated among the community. The underprivileged and economically weaker sections have also benefitted from the activities.

The CSR projects / activities taken up by RITES are in accordance with the sectors as defined in the Schedule VII of Companies Act 2013. Key projects taken up during FY 201516 are as  follows :

SECTOR: Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation including contribution to the Swachh Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water

1.    Distribution of Assistive Devices to Persons with Disabilities (PwDs)

RITES has joined hands with ALIMCO to provide assistive devices to Persons with Disabilities (PwDs) in Gurgaon, Haryana. Various assistive aids such as wheelchairs (Adult & Child), joystick operated wheelchairs, tricycles, hearing aids, MSIED Kit, crutches, walking sticks, BTE Digital type hearing Aid have been  provided to over 200 Persons with Disabilities.

The project aims to bring Persons with Disabilities  into a more functional stream of life and restore their confidence to undertake activities with the help of aids & appliances.

2.    Construction of Public Toilets in Madan Mohan Malvia Inter College Ghazipur, U.P.

RITES has set up Public Toilets in the premises of Madan Mohan Malviya Inter College, Ghazipur, UP. Madan Mohan Malviya Intercollege is located in Sikhari village of Jakhani tehsil in Ghazipur district. The college has inadequate  sanitation facilities. With the vision of Swachh Bharat, RITES has set up  toilets in this college.

3.    Providing Advance Life Support (ALS) Ambulance to   District Hospital, Ghazipur, U.P.

RITES has provided an Advanced Life Supported Ambulance (ALS) to Civil Hospital Ghazipur, UP, to expedite shifting of accident victims from the accident spot to the District Hospital or other advanced medical centres and to provide prompt transport for referral treatment for complicated maternity cases, as well as  trauma cases,  through secure transport system equipped with medical facility. Ghazipur does not have adequate hospitals and Varanasi is about 80 kms. Away, hence, the ALS Ambulance will facilitate transfer of critical cases from Ghazipur to Varanasi. 

4.    Provision of Hand Pumps for Drinking Water and Solar Street Lights for the Villages of Constituency of Phoolpur, Allahabad, U.P.

RITES has provided Hand Pumps for drinking water as well as  Solar Street Lights for the villages of Constituency of Phoolpur, Allahabad  (U.P.)

There is a severe shortage of drinking water in the villages of Phoolpur. Installation of Hand pumps will give villagers access to drinking water for fulfilling their basic needs.

Installation of the street lights will benefit the villagers and children who can continue their routine jobs as well as studies. The primary benefits from access to electricity include improved education, human health, communication and entertainment, comfort, protection, convenience, and productivity.

5.    Construction of Public Toilets in Varanasi, U.P.

RITES has set up  Public Toilets, through Varanasi Nagar Nigam , at Machchodri Park & Beniyabagh in Varanasi for elimination of open defecation by  public by providing them access to toilet & sanitation facilities. The project will provide sanitation facilities in the areas of Varanasi, which will reduce the incidences of health issues leading to healthy community and overall development of the people living in and visiting these areas. This will bring about an improvement in the general quality of life by promoting cleanliness and hygiene.

6.    Setting up Bio-Digester Public Toilets  in Varanasi, U.P.

RITES has set up bio-digester Public Toilets in Varanasi, (UP) at Sakka and Teliyanalla ghat, Varanasi through usage of technology to set up affordable, and sustainable models for city wide deployment of such infrastructure.

At the Sakka and Teliyanala ghats no permanent structure can be constructed, hence mobile/portable toilets with Biodigester technology have been set up  at these locations. To conform to CPCB norms of effluent, reed bed technology has been adopted for the Bio-digester.

7.    Providing Fully Auto Biochemistry Analyser to Charitable Hospital at Vrindaban, Mathura, U.P.

RITES has provided Fully-Auto Bio-Chemistry Analyzer for the Laboratory of Ramakrishna Mission Sevashrama Charitable Hospital, Vrindavan.

The objective of the project is to provide free facility for pathological investigations for the  benefit of the poor, distressed, widows, needy pilgrims and local community of Vrinadavan.

8.    Construction of Public Toilets  at   Railway Station Gurgaon, Haryana

RITES has set up 3 numbers of public toilet complex within the premises of the Gurgaon Railway Station with the objective of facilitating the passengers as well as the public visiting the Station.

There are lot of passengers and other visitors to the station complex, whereas the public toilet facilities are disproportionately low. Providing this facility will greatly benefit these people. Sanitation and environment around the station will improve tremendously.

9.    Augmentation of drinking water etc. for Passenger amenities at Agra Railway Station

RITES has upgraded the passenger amenities at Agra Cantt. Station of North Central Railway by providing safe drinking water for passengers at the Railway Station. This includes provision of borewell with pump house, 2 rooms for installation of RO Plants, water storage tank, water booths, water coolers and water pipeline from borewell to storage tank, etc. for providing safe drinking water for passengers at Agra Cantt. Station.

SECTOR : Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects

10. SOS Children's Villages of India : sponsoring  youth for employment linked higher education

RITES has sponsored Employment Linked Higher Education for 19 Youth under project Utkarsh enabling them to become self reliant and Independent as a CSR Initiative for SOS Childrens Villages of India.

11. Recruitment & Retention of Voluntary blood donation for safe blood transfusion through education in the backward district of West Bengal - 24 Parganas, West Bengal.

RITES has through Association of Voluntary Blood Donors, West Bengal spread awareness regarding the importance of blood donation, as well as encouraged volunteers to donate blood. Objective of the Association is to spread awareness, distribute course material and conduct programs regarding the importance of blood donation, as well as encourage volunteers to donate blood. This is achieved through Education Programme, District Level Certificate Course for Blood Donor Motivators and University / College Level Certificate Course, Blood Donation camps, Publications, Exhibitions.

12. Providing  Equipments for Laboratory in Vocational cum Skill Development Training Center for backward area of Southern Rajasthan to generate alternative employment opportunity for Rural youth and Women - Vishvas Sansthan, Udaipur, Rajasthan

RITES has provided Tools and Equipments for Skill development training such as Consumable Kits, Trainees Tool Kits, Shop Tools, Instruments and Machinery for the Laboratory to Vocational cum Skill Development Training Cantre, Vishvas Sansthan, Udaipur, Rajasthan, covering the Districts of Banswara, Dungarpur and Udaipur. This Institute will help to generate alternative employment opportunity for Rural Women and Youth. Focus will be on training and skill development resulting in meaningful employment.

13. Providing Equipment & Furniture to Swapna Sarthak School, Gurgaon, Haryana

RITES has provided Laptops, Printers & Furniture to Swapna Sarthak School, in DLF Phase III, Gurgaon , which is run by Gunjan Foundation.

Objective of the project is to encourage educational pursuits of underprivileged children and improving their living condition through education and social awareness, to promote empowerment through education. It enables beneficiaries achieve self-respect and self-reliance, which fosters hope and confidence in pursuing fulfilling lives.

14. Sponsoring rural education through running  schools in rural , remote, hilly areas

RITES has helped in sponsoring education for the up-liftment of the deprived sections society in Tribal and Rural areas through adoption of EKAL Vidyalayas in  Kolkata, Guwahati, Secunderabad, Mangalore, Nagpur.

Objective of the project is to provide basic functional Education, Health Care Education, Village Development & Sustainability Education and Empowerment Education to children of remote and tribal areas by Bharat Lok Shiksha Parishad under Ekal Vidyalaya Movement with the concept of one teacher school.

The children of remote, rural and tribal areas facing multitude problems like illiteracy, poverty, all sorts of shortages, sanitation, health hazards, mal-nutrition, health care and of self respect & self esteem too are benefitted.

15. Construction of Vocational training / skill development institute for under privileged children of rural areas ( Vrindavan / Mathura etc )

RITES has contributed for part construction of a Vocational Training & Skill Development Institute for the underprivileged children of rural areas of Vrindavan, Mathura through Bhakdivedanta Gurukula and International School.

Objective of setting up Vocational Training & Skill Development Institute is to impart vocational training & skill development among the economically backward and underprivileged section of society in Vridavan, Mathura.

16. Construction of Preventive Health Care and Skill Development Training and Research Institute, New Delhi

RITES has contributed for part construction of a Preventive Health Care and Skill Development Training and Research Institute for Santhigiri Ashram, New Delhi. The Santhigiri Ayurveda and Siddha & research centre with Skill Development Institute coming up at Delhi will be focusing on healthcare of population in Delhi & NCR by adopting villages, conducting programmes in schools to abolish malnutrition, provides training in Yoga and Skill Development programmes for unemployed youths in Ayurveda Para medical branches.

17. Supply of Equipment -  Computer, Printer, UPS & furniture  for Khanpur Ghati Girls School at Mewat, Haryana

RITES has provided Computers for the Mewat Model School at Khanpur Ghati, Mewat. RITES had earlier undertaken Construction of the girls hostel as part of the residential school complex for this school.

Objective of the project is to encourage education of girls from backward and remote areas by providing them education and meeting the aspirations of the girl children studying within the school premises. As application of Computers is gaining importance in the day to day life of children, therefore, to impart knowledge, computers were provided for the school.

18. Skill development training of Persons with Disabilities (PwDs)

RITES has with the expertise of  National Handicapped Finance and Development Corporation (NHFDC) conducted the training of Persons with Disabilities between 15-50 years of age in Delhi, NCR.

Objective of the project is to make them capable and self dependent through appropriate training in the field of traditional occupations and entrepreneurship such as repairing / servicing of mobile phones / electrical appliances, fashion designing, computer courses, etc.  

The project benefits about 300 PwDs to bring them into normal stream of life by enabling them to lead a  self dependent life as well as be gainfully employed.

SECTOR : Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups

19. SOS Children's Villages of India : sponsoring children's homes

RITES has contributed towards supporting  4 Childrens Family Homes at SOS Children's Villages in Bhubaneshwar, Kolkata and Faridabad. Each family home provides a caring loving home to 8 10 parentless children. RITES has provided support for nutrition, clothing, education, health and upkeep of the homes.

Beneficiaries are the parentless children of SOS Childrens Villages of India who will be attending school / college education and vocational training and will get all the logistic support.

SECTOR : Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga.

20. Development and Maintenance of Green cover along sector roads and backside of RITES Bhawan, Gurgaon, Haryana

RITES has taken up tree plantation and maintenance of Green cover along sector roads and backside of RITES Bhawan, Gurgaon, Haryana. The project covers plantation of new trees/plants/shrubs and maintenance of existing plants.

The project promotes conservation of the environment for the benefit of the general public of this financial and industrial city situated near New Delhi and in the National Capital Region. It also contributes towards beautification of the city.

21. Solar Street Lighting Systems for Rural Communities in Ghazipur U.P.

RITES has installed of Solar Street Lighting Systems in Ghazipur District in UP.

Objective of the project is to provide solar powered street lighting systems to the villages situated in Ghazipur district in UP. Power outages are  very high in these areas. Installation of solar street lights will benefit the villagers and children residing in the village of Block Saidpur & Jamunia District, Ghazipur, immensely. Implementing Agency is CEL.

22. Solar Street Lighting Systems for Rural Communities Bhadohi U.P.

RITES has through  Central Electronics Ltd. (CEL) provided Solar Powered Street Lights  to Rural Communities in the villages situated in Bhadohi district of Uttar Pradesh. Although some villages are electrified the power crisis is very high in villages of Bhadohi district in the state of Uttar Pradesh. Installation of solar powered street lights will have a positive impact on the lives of the inhabitants of these villages.

23. Installation of 100 KWp Grid Interactive Solar Photovoltaic Power Plant for Deployment at Jodhpur Railway Station Building, Rajasthan

RITES has  taken up the project of installing 100 KWp Grid Interactive Solar Photovoltaic Power Plant at Jodhpur Railway Station Building, Rajasthan through CEL. Beneficiaries of the project will be the passengers and visitors to the station.

SECTOR : Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts

24. Providing Passenger amenities at Howrah railway station, West Bengal

RITES has taken the initiative for up-grading the passenger amenities such as signages etc. at Howrah Railway Station. Objective of the project is improvement of signages at Howrah Railway Station which is a heritage building and entails the complete re-designing of passenger guidance system, lighting and ambience of the station to make it easy for the passengers to navigate through the large complex. While enhancing the historical value of the structure, the signage will create awareness in the passengers about all the facilities available in the station. This includes design of way findings Signage System and Beautification of buffer end area of some platforms.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

      RITES being a knowledge based company, puts lot of emphasis on talent acquisition, talent engagement, welfare schemes, learning and development of its human resources. RITES has a mixed bag of experienced professionals and fresh GETs/MTs. Commensurate with the emerging needs of growing business, RITES has inducted staff on deputation from Railways, hired experienced manpower on direct recruitment basis, hired GETs/MTs from campuses like IIM, XLRI, IITs etc., along with regular induction of GETs through GATE score. During the year 2015-16, while 27 Graduate Trainee Engineers have been inducted through GATE score,  195 experienced professional have joined in different capacities.

      Intake of experienced professionals on deputation from Railways, other Govt. departments and PSU is also strategic requirement of the company. In the last financial year 53 employees have joined RITES on deputation basis.    At present 174 employees are working in different divisions/SBUs on deputation basis.

      RITES puts a lot of emphasis on the development and career progression of employees. During the financial year 2015-16, 8018 man-days of training have been provided to employees.  While 3698 man-days have been provided in the Quality Assurance Division, 4320 man-days of training have been provided to others. 85 Senior Business Leaders were nominated for Leadership Development program in India and abroad. 2-days workshop on Strategic Leadership Development was organized for middle management in collaboration with IMI Delhi, a leading management institute of the region. 258 Employees have been promoted to next higher level during the year. 29 Employees have been placed in their higher pay scale on completion of longer period. 64 Selections on promotion basis have been completed. 

      Transparency in the processes and ease of operations is one of the objectives of the HRD function. This year Electronic Performance Management System has been introduced, which enables paperless and transparent on-line process to fill the APARs. The system has been developed with an objective to complete the APAR filling process with quality and defined time limits.

      RITES is focused on the improvement of policies and procedures so as to enable its employees for better coordination for their welfare as well as to empower them for more accountability and responsibility to function in their roles. Endorsing the need of digitization in the country and to ensure business continuity, RITES has implemented Digitization of Records in the Personnel section. Personnel records of employees, policy files etc have been kept in digital format. The internal systems are being revised in accordance with ISO requirements. Keeping a health employee-employer relationship, online grievance portal system has been developed and timelines for settlement of grievances along with accountability of officers has been fixed.

      RITES has adequate and robust schemes in place for welfare of the employees. Subsidized canteen facility, health cover, medical scheme, Post Retirement Medical Scheme, Post Retirement Pension scheme, health checkups at regular intervals, allowances, provision of company and self lease for residential accommodation etc are in place for betterment of the staff.

      To encourage educational excellence in the wards of all non-executive staff, merit scholarship/cash awards are given to their wards, where they score 70% (boys) and 65% (girls) in their 10th, 12th std. Board Exams.  Further, wards of employees upto the level of Manager, are also given merit scholarship/cash awards where their children are pursuing higher education (B. Tech/MBA/CA etc.) and scored 65% marks (girls) & 70% marks (boys).

      To recognize the outstanding contribution of employees in their working, a Reward & Recognition scheme to choose Employee of the Quarter is in place and given to 2-employees for each quarterly period: one in executive & one in non-executive cadre. 

      For the financial year 7 employees were given as Employee of the Quarter similarly, every year, 1-employee was given as Employee of the Year for (his/her) outstanding professional contribution.  

IMPLEMENTATION OF RIGHT TO INFORMATION (RTI) ACT, 2005

Right to Information (RTI) Act, 2005 has empowered the Indian citizens to access information from the public authorities, resulting in transparency and accountability to the working of the authorities. Awareness of this Act has gained momentum after a slow initiation; increasing number of applications is a testimony.

Designate Public Information Officer (PIO) has been entrusted with the responsibility of providing information to citizens under the Act; the Assistant Public Information Officers (APIOs) at Regional Project/Inspection Offices are entrusted with the responsibility to receive the tendered applications/appeals under Section 5(2) of the Act and to forward these to the PIO at the Corporate Office, Gurgaon.

During the year 2015-16, office of the Public Information Officer (PIO), received 241 new applications seeking information under the RTI Act, 2005, whereas the Office of the First Appellate Authority (FAA) received 47 first appeals as against 178 and 44 respectively during the last financial year, 2014-15. RITES also complied with the decision of the Hon'ble Central Information Commission (CIC) in three second appeals.

Challenge to provide the information within the stipulated time, record management systems and procedures have been reviewed and infrastructure (computers, scanners, internet connectivity, photocopiers etc.) have been enabled. Categories of information frequently sought, have been identified and such information, catalogued and organized for easy retrieval, is being disclosed proactively in the public domain. RITES' website is being used effectively for dissemination of information, organized in a retrievable user friendly database.

EXHIBITIONS

The Company as a part of business strategy participated in specialized trade expositions with the objective of displaying its multifarious capabilities to numerous prospective clients, high-level delegations and ministerial participation. It helped in exploring business opportunities in the transport and infrastructure sectors and provided business linkages. These various expositions play an important role in building corporate initiatives for integrated development across diverse domains and providing exposure. In the new global scenario, they offer a strong platform for building long-term sustainable relations with clients. The company participated in various expositions such as:

·         The Maritime India Summit - 2016 held at Mumbai organisedby Confederation of Indian Industry (CII), 14-16 April, 2016.International Conference/Exhibition on South-South Cooperation organized by the Research and Information System for Developing Countries (RIS), March 10-11, 2016, India Habitat Centre, New Delhi The 11th edition of International Railway  Equipment Exhibition (IREE 2015), organized by the Confederation of Indian Industry (CII) in association with Ministry of Railways was held from 14th to 16th October, 2015 at Pragati Maidan, New Delhi, India.

AWARDS

Company received following awards for its performance during the year 2015-16:

1.    Niryat Shree Gold Trophy for Highest Exports in 2015

Niryat Shree Gold Trophy of FIEO received from the Honble President of India, Shri Pranab Mukherjee for the highest engineering goods exports done in the non MSME category. RITES was the only PSU among the 41 recipients of this award.

2.    13th National Award for excellence in cost management 2015

13th National Award for excellence in cost management (2015) from Shri Najib Shah, Chairman of the Central Board of Excise and Customs, under the category of Public- Service Sector (Medium).

3.    EEPC Gold Trophy for Top Exporters 2012-13

EEPC Gold Trophy for Top Exporters Award being given to RITES for the year 2012-13 by EEPC India, Northern region, in the merchandise category of foreign exchange earnings of Rs.342 crore.

4.    India Today Best Performing Company and Global Presence Award - 2015

India Today MDRA best Performing Company and Global Presence award 2015 among the Central Sector Enterprises.

5.       PSU Excellence Awards 2015  from Governance Now.

AUDITORS

The Comptroller & Auditor General of India appointed the following as Statutory & Branch Auditors for the year 2015-16.

The Board would like to place on record their sincere thanks for the valuable services rendered by Statutory Auditors and the Branch Auditors. 

SECRETARIAL AUDITOR

The Board has appointed Mr. Akhil Rohatgi, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 has been placed at Annexure IV.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1.         Details relating to deposits covered under chapter V of the Act.

2.         Issue of equity shares with differential rights as to dividend, voting or otherwise.

3.         Issue of shares (including sweat equity shares) to employees of the Company under any Scheme save and except ESOS referred to in this report.

4.         Neither the Chairman and Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5.         No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

APPRECIATION

The Directors take this opportunity to express their sincere thanks to the esteemed Clients in India & abroad, Shareholders, Central and State Governments for their consistent support to the Company and look forward to the continuance of the mutually supportive relationship in future. The Directors also wish to place on record their appreciation of the hard work, dedication and commitment of the employees. The enthusiasm and unstinting efforts of the employees have enabled the Company to touch new heights during the year.

ACKNOWLEDGEMENTS 

Your Directors would like to express their appreciation for the assistance and co-operation received from the Ministries of Railways, Road Transport and Highways, External Affairs, Finance, Commerce, Urban Development, and other ministries, departments and agencies, office of Comptroller & Auditor General, Reserve Bank of India, Bankers of the Company, Indian Embassies & Missions abroad and Foreign Missions & Embassies in India, EXIM Bank without whose active support the achievements of the Company during the year under review would not have been possible.

For and on behalf of Board of Directors

Place:  Gurgaon                                                                                                                (Rajeev Mehrotra)

Dated: 26.07.2016                                                                           Chairman and Managing Director &

                                                                                                                                    Chief Executive Officer

Annexure A

REPORT ON CORPORATE GOVERNANCE

Corporate Governance is a set of systems and practices to ensure that the affairs of the Company are being managed in a way which ensures accountability, transparency, fairness in all its transactions and meet its stakeholders aspirations and societal expectations. Corporate Governance is critical for enhancing and retaining investor trust. Corporate Governance facilitates efficient and effective management and is all about maintaining a valuable relationship and trust with all its stakeholders. Corporate Governance is a journey incorporating sustainable value creation and maximizing stakeholder value. Corporate Governance also provides competitive edge in the dynamic environment and establishes a climate of trust, confidence and creativity among its various constituents by making all necessary disclosures, complying with all the laws of land and creation of wealth legally and ethically.

1.     Companys Philosophy on the code of Governance

The philosophy of the Company in relation to Corporate Governance is to ensure transparency in all its operations, make disclosures and reporting that conforms fully with laws, rules, regulations and guidelines and to promote ethical conduct throughout the organization with the primary objective of enhancing shareholders value.

RITES believes in promoting the principles of sound Corporate Governance and its essential character is shaped by high standard of transparency, trust and integrity, performance orientation, responsibility, accountability, professionalism, social responsiveness and ethical business practices. RITES lays special emphasis in conducting its affairs within the framework of policies, internal and external regulations in a transparent manner. Corporate Governance has indeed been an integral part of the way we have done business for several years. This emanates from our strong belief that strong governance is integral to creating value on a sustainable basis.

2.      Board of Directors:

The Board of Directors is the highest governance body of RITES. The Board of Directors consists of professionals drawn from diverse fields having rich knowledge and experience in the industry and related sectors for providing strategic guidance and directions to the Company.

Board of the Company comprises of 9 Directors viz 4 functional Directors including Chairman & Managing Director, two Government Nominee Directors and 3 Independent Non-Official Directors.

The composition of the Board is in consonance with the Guidelines issued by DPE.

As on 31st March, 2016, Company has six (6) Directors including four Functional Directors and two Government Nominee Directors

Ministry of Railways vide letter dt 01.04.2016 have conveyed the appointment of following as Independent Director on the Board of the Company :

1.Dr. Vidya Rajiv Yeravdekar

2. Shri Anil Kumar Goel

3. Shri Satish Sareen.

Shri R.S kochak, Additional Member (PU), Railway Board has joined the Board of the Company as Government Nominee Director w.e.f 07.09.2015.

2.1    Composition of the Board of Directors

During the year under review, due to induction / cessation, the composition of the Board has undergone changes. The names and categories of Directors on the Board, number of Directorships and Committee Chairmanship/Membership held by them in other companies are as under:

*        Does not include Directorship in Private Companies, Section 8 Companies and Foreign Companies.

**      Does not include Chairmanship/ Membership in Board of Committees other than Audit Committee and Shareholders Grievance Committee.

***     None of the Directors on the Board is a member of more than 10 committees or chairman of more than 5 committees across all the companies in which he is a Director.

2.2   Brief Resume of Directors who joined the Board as Whole - time / Part - time Directors during the year 2015-16:

1.Mr. R.S Kochak 59 years, is our Government nominee Director.   He is a Mechanical Engineer by profession with 37 years of experience with Railways.   At present, he is working as Additional Member (Production Units) in Railway Board where he does apex level coordination for production and maintenance of rolling stock in 8 Production Units and 44 workshops.   Earlier, he has worked in Research Designs & Standards Organization (RDSO) on computer modeling,  simulation and optimization of suspension design & under-frame design.  He  has worked as Chief Design Engineer in Rail Coach Factory, Kapurthala on new design AC Double Decker coaches as also on transfer of technology from Germany.  He has also worked in administrative jobs as Additional Division Railway Manager at Lumding & as Divisional Railway Manager at Jhansi and Chief Mechanical Engineer of SEC Railway at  Bilaspur for 3 years.   He has worked for 5 years  as GM/Rolling Stock Design Division at RITES and was responsible for CONCOR flat rail cars business development for RITES Ltd.   He also started the Crashworthy Coach Design Programme for IR, through RITES Ltd.   He joined our Board on 7th September, 2015.

2.  Dr. Vidya Rajiv Yeravdekar 52 years is our Non-Official Independent Director w.e.f 01.04.2016. She is the Principal Director of Symbiosis Society, which encompasses the Symbiosis schools and institutions under the Symbiosis International University. She holds a Post Graduate Degree in Medicine, a degree in Law and Ph.D. in 'Internationalisation of Higher Education in India. Dr. Vidya has been able to influence policy regulations for promoting and bringing in innovative approaches to higher education in India through her appointments on various governmental bodies. She has been a member of University Grants Commission and Central Advisory Board of Education (CABE). She is a member of the Governing Board of several organisations like Indian Council for Cultural Relations, Indian Institute of Mass Communication, Indian Institute of Corporate Affairs, Swarnim Gujarat Sports University, Yeshwantrao Chavan Maharashtra Open University. She is a Member of the State Knowledge Advisory Board of Higher Education, Government of Andhra Pradesh and Member of the Task Team of Arts Management Strategy for Karnataka. She is a member of many corporate bodies such as Mahratta Chamber of Commerce & Industries, Federation of Indian Chambers of Commerce & Industry (FICCI), Confederation of India Industry (CII), and Not for profit organisations like HK Firodiya Foundation, India International Centre (IIC), Pune International Centre (PIC) & Pune Citizens Police Foundation. Dr. Vidya has presented papers at various National & International Conferences and has numerous research publications to her credit. Dr.Vidyas hard work has won her numerous awards and accolades and she is now focussed on making Symbiosis International University benchmarked amongst one of the best Universities in Asia. 

3. Mr. Satish Sareen - 50 years is our Non-Official Independent Director w.e.f 01.04.2016.  He is a Practising Chartered Accountant having more than 24 years of experience with specialisation in Taxation and Company Law matters. In addition to RITES, he is also a Director in Hindustan Salts Ltd and Integral Urban Co-operative Bank Ltd. He is involved in various social & welfare activities also besides professional development activities.

4.  Mr. Anil Kumar Goel - 54 years is our Non-Official Independent Director w.e.f 01.04.2016. He is a Practicing Chartered Accountant having more than 27 years of experience with specialization in Corporate & Tax Laws, Statutory & other audits of Public Sector Banks, Manufacturing Industries, Retailers, Whole Sellers, Service Providers, Importers, Exporters, Co-op Societies, NGOs & Trusts. He is a Qualified ARBITRATOR & MEDIATOR from ICAI, Qualified Information Systems Auditor (DISA) & Qualified Banks Concurrent Auditor. He is Empanelled Member of Peer Review Board of ICAI. He was a Member of GST Research Group of ICAI, VAT & NGO research Group of NIRC & various other committees of ICAI & Sales Tax Bar Association, New Delhi. He was Joint Secretary cum Treasurer of SALES TAX BAR ASSOCIATION (Regd), New Delhi in the year 2015. He has written various articles, being published in Professional magazines & Newsletters etc. He has also delivered many lectures on various forums on Taxation & other Professional matters & also on various Social issues. He is involved in various Social activities & office bearer with many social organizations. He is Founder & All India Treasurer of JAMMU KASHMIR ADHYAYAN KENDRA (Regd) (JK Study Centre), engaged in National cause of Study & Research relating to Constitutional & Legal Issues & Eco - Socio Development & other issues relating to J&K State.

2.3 Number of Board Meetings:

The Board met seven times during the year 2015-16 to review the working of the Company and discuss the future plans etc.

Note: - Dates of the meeting and attendance of the Directors in the meeting are placed as Annexure- 1 to this report

3.    Code of Conduct:

RITES Code of Conduct for Board Members and Senior Management Personnel as recommended by Corporate Governance is a comprehensive code that applies to all Directors and Senior Management Personnel. The Code of Conduct is available on the website of the Company i.e www.rites.com.

All Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the year ended 31st March, 2016 and a declaration to this effect signed by the Chairman and Managing Director is placed as Annexure 2 to this report.

4. Committees of the Board of Directors:

4.1 Audit Committee:

The Company had Audit Committee with Independent Directors forming majority. However, the term of two Independent Directors got completed on 28th December, 2013 and the term of the third Independent Director got completed on 24.06.2014.

Thereafter, Board of Directors from time to time had re-constituted Audit Committee  with Govt Nominee Director forming majority with the condition that the Committee will be re-constituted, once the Independent Directors are in position.

The Audit Committee was last constituted by Board of Directors in their 219th meeting held on 8th January, 2016 with Shri R.S Kochak, Government Nominee Director (Chairman), Shri A.P Dwivedi, Government Nominee Director and Shri S.B Malik, Director Technical as members with the condition that the Committee will be re-constituted, once the Independent Directors are in position.

With the appointment of Independent Directors on the Board of the Company w.e.f 01.04.2016, Board of Directors in their 221st meeting held on 3rd June, 2016 constituted Audit Committee comprising of Shri Anil Kumar Goel, Independent Director as Chairman, Dr. Vidya Rajiv Yeravdekar, Independent Director, Shri Satish Sareen, Independent Director, and Shri Arbind Kumar, Director Projects as members.

4.2 The terms of reference of the Audit Committee are broadly as under:

  Oversight of the Companys financial reporting process and the disclosures of its financial information to ensure that the financial statements are correct, sufficient and credible;

  Recommending  to the Board regarding the fixation of audit fees;

  Approval of payment to statutory auditors for any other services rendered by them;

  Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to;

        Matters required to be included in the Directors Responsibility Statement to be included in the Boards report in terms of section 134 of the Companies Act, 2013;

        Changes, if any, in accounting policies and practices and reasons for the same;

        Major accounting entries involving estimates based on the exercise of judgment by management;

         Significant adjustments made in the financial statements arising out of audit findings;

        Compliance with the legal requirements relating to financial statements;

        Disclosures of any related party transactions; and

        Qualifications in the draft audit report.

  Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;

  Reviewing, with the management, the statement of uses/ application of funds raised through an issue (public issue, right issue, preferential issues etc), the statement of funds utilized for the purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of public or right issue and making appropriate recommendations to the Board  to take up steps in this matter;

  Reviewing, with the management, performance of statutory and internal auditors and adequacy of the internal control system;

  Reviewing, the adequacy  of the internal audit function, if any, including the structure of  the internal audit  department, staffing and seniority of the officials heading the department, reporting structure coverage and frequency of internal audit.

  Discussion with Internal Auditors on any significant findings and follow-up thereon.

  Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board;

  Discussion with the statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any areas of concern;

  To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders(in case of non-payment  of declared dividends) and creditors;

  To review the functioning of the whistle blower mechanism, in case the same is existing;

   To review the follow up action on the audit observations of the C&AG audit;

  To review the follow up action taken on the recommendation  of committee on  public Undertakings (COPU) of the Parliament;

  Provide an open avenue of communication between the independent  auditor, internal auditor and the Board of Directors;

  Review and pre-approve all related party transactions in the Company. For this purpose, the Audit Committee may designate a member who shall be responsible for pre-approving related party transactions;

  Reviewing with the independent auditor the co-ordination of  audit efforts to assure completeness of coverage, reduction of redundant efforts, and the effective use of all audit resources;

  Consider and review the following with the independent auditor and the management;

         The adequacy of the internal controls including computerized information system controls and security, and

         Related findings and recommendations of the independent auditor and internal auditor, together with the management responses.

  Consider and review the following with the management, internal auditor and the independent auditor;

         Significant findings during the year, including the status of previous audit recommendations.

         Any difficulty encountered during audit work including any restrictions on the scope of activities or access to required information.

  Approval of related party transaction.

  Scrutiny of inter corporate loans and investment.

  Valuation of undertaking or assets of the company.

  Evaluation of internal financial control and mismanagement system.

  Monitoring the end use of funds raised through public offers.

  Carrying out any other function as mentioned in the terms of reference of the Audit Committee.

4.3 Meetings of Audit Committee:

The Audit Committee met once during the financial year 2015-16 on 9th March, 2016. The attendance of each member at Audit Committee meetings is as under:

4.4 Powers of Audit Committee:

            1.  To investigate any activity within its terms of reference.

            2.  To seek information from any employee.

            3.  To obtain outside legal or other professional advise.

            4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

            5. To mitigate conflicts of interest by strengthening auditor independence

5. Remuneration Committee:

   RITES, being a Government Company, its Directors are appointed by the President of India through Ministry of Railways, draw remuneration as determined by the Government and as per the terms and conditions of their appointment and as amended from time to time.

As per Guidelines on Corporate Governance for CPSEs 2010 issued by DPE in May, 2010, each CPSE is required to constitute a Remuneration Committee comprising of atleast three Directors, all of whom should be Part-time Directors (i.e Nominee Directors or Independent Directors). The Committee should be headed by an Independent Director. Remuneration Committee will decide the annual bonus/variable pay pool and policy for its distribution across the executives and non unionized supervisors, within the prescribed limits.

In accordance of these guidelines, the Board of Directors in their meeting held in October, 2011, re-constituted Remuneration Committee comprising of Dr. Vinayshil Gautam, Independent Director (Chairman), Shri Vinod Somani, Independent Director and Shri Debidas Datta, Independent Director as members.

However, since the term of two Independent Directors viz Shri Vinod Somani, (Chairman) and Dr. Vinayshil Gautam, (member) was completed on 28th December, 2013. The term of the third Independent Director i.e Shri Debidas Datta got completed on 24.06.2014. Thereafter, the Remuneration Committee was not in position.

Further, as per Section 178 of Companies Act, 2013 & Rule 6 of {Companies (Meetings of Board & its Powers)} Rules, 2014, Company is required to constitute a Nomination & Remuneration committee, who shall identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every directors performance. The Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.

However, as per Notification dt 5th June, 2015 issued by Ministry of Corporate Affairs, the provision of Section 178 shall not apply to Government Company except with regard to appointment of Senior Management & Other employees.

The expression senior management means personnel of the company who are members of its core management team excluding Board of Directors comprising all members of management one level below the executive directors, including the functional heads.

As per rule 2(k) of the Companies (Specification of definitions details) Rules, 2014 Executive Director means a whole time director which includes Director in the whole time employment of the Company as defined in clause (94) of section 2 of the Act.

In view of the same, with the appointment of Independent Directors on the Board of the Company w.e.f 01.04.2016, Board of Directors in their 221st meeting held on 3rd June, 2016 constituted Nomination and Remuneration Committee comprising of Shri Satish Sareen, Independent Director as Chairman, Dr. Vidya Rajiv Yeravdekar, Independent Director, Shri Anil Kumar Goel, Independent Director and Shri R.S. Kochak, Government Nominee Director, as members. The said committee will also decide the annual bonus/variable pay pool and policy for its distribution across the executives and non unionized supervisors, within the prescribed limits as was being earlier decided by Remuneration Committee.

Details of Remuneration of Functional Directors of the Company during the year 2015-16 are as under:

The Independent Directors are paid sitting fee of Rs. 17,500/- for attending Committee meetings and Rs. 20,000 for attending Board meeting.

During the year 2015-16, there were no Independent Director on the Board of the Company, hence no sitting fee was paid.

6.  Risk Management Committee: The Board of Directors in their meeting held in May, 2011 had re-constituted the Risk Management Committee comprising of Shri Debidas Datta, Independent Director (Chairman), Dr. Vinayshil Gautam, Independent Director, Shri Vinod Somani, Independent Director, Director Finance and Director Technical as members. The term of two Independent Directors viz Shri Vinod Somani, (Member) and Dr. Vinayshil Gautam, (member) was completed on 28th December, 2013 and the term of the third Independent Director i.e Shri Debidas Datta got completed on 24.06.2014. However, with the appointment of Independent Directors on the Board of the Company w.e.f 01.04.2016, Board of Directors in their 221st meeting held on 3rd June, 2016 constituted Risk Management Committee comprising of Shri Anil Kumar Goel, Independent Director, as Chairman, Shri R.S Kochak, Govt. Nominee Director, Shri A.P. Dwivedi, Govt. Nominee Director and Shri Ajay Kumar Gaur, Director Finance, as members

Execution of foreign projects gives rise to currency variation risk.  For this purpose, company regularly monitors exchange fluctuations to mitigate this risk, as company has a sound currency risk management policy in place.  Policy covers various aspects of currency risk management, benchmarking, hedging and risk appetite, permissible Instruments, hedging policy, structure of the risk management committee and treasury group, reporting procedures etc.

In this respect Company has also constituted Treasury Risk Management Committee and an assistance is also taken from an external consultant/economist as and when required.

7.          Project Investment Committee:  The Board of Directors in their meeting held in July, 2011 reconstituted Project Investment Committee comprising of Shri Vinod Somani, Independent Director (Chairman). Dr. Vinayshil Gautam, Independent Director, Shri Debidas Datta, Independent Director, Director Finance & the concerned whole time Director as members to deal with the appraisal and approval of all the projects involving Equity participation. The term of two Independent Directors viz Shri Vinod Somani, (Chairman) and Dr. Vinayshil Gautam, (member) got completed on 28th December, 2013.The term of the third Independent Director i.e Shri Debidas Datta got completed on 24.06.2014.

With the appointment of Independent Directors on the Board of the Company w.e.f 01.04.2016, Board of Directors in their 221st meeting held on 3rd June, 2016 constituted comprising of Dr. Vidya Rajiv Yeravdekar, Independent Director, as Chairperson, Shri Satish Sareen, Independent Director, Shri Anil Kumar Goel, Independent Director, Shri A.P. Dwivedi, Govt. Nominee Director, Shri Ajay Kumar Gaur, Director Finance and the concerned whole time Director as members

8. CSR Committee:

     In order to comply with the Guidelines on CSR and Sustainable Development issued by DPE in September, 2011, the Board of Directors in their meeting held in November, 2011 has constituted a CSR and Sustainability Committee comprising of Shri Debidas Datta, Independent Director (Chairman) and Shri Sumit Sinha, Director (Technical) as member to oversee the Sustainable Development projects.

However, after the term of Shri Debidas Datta got completed on 24.06.2014, Board of Directors had re-constituted CSR Committee and Sustainability Committee with Shri Arvind Khare, Government Nominee Director (Chairman), Director (Technical), Director (Projects) and Director (Finance) as members. Shri Arvind Khare got superannuated on 30th April, 2015. 

With the appointment of Independent Directors on the Board of the Company w.e.f 01.04.2016, Board of Directors in their 221st meeting held on 3rd June, 2016 constituted CSR Committee comprising of Shri Satish Sareen  Independent Director as Chairman, Dr. Vidya Rajiv Yeravdekar, Independent Director, Shri Anil Kumar Goel, Independent Director, Shri A.P. Dwivedi, Govt. Nominee Director, and Shri Ajay Kumar Gaur, Director Finance as members.

9.  General Body Meeting:

The Annual General Meetings of the company are held at New Delhi where the registered office of the company is situated. The details of the last three Annual General Meetings of the Company are as under:

10. Subsidiary Companies:

   The Company has two Indian Subsidiaries i.e (i) RITES Infrastructure Services Limited incorporated on 27.04.2010 with the main object of construction, operation and maintenance of Multi-functional Complexes in the vicinity of Railway land. The Board of Directors of RISL has decided to initiate the process of winding up during the year 2016-17 and (ii) Railway Energy Management Company Limited incorporated on 16th August, 2013 in Joint Venture with Ministry of Railways for taking up various assignments/tasks to develop potential business avenues in the field of power sector including Green Energy, power trading etc. Further, the Company has two subsidiary companies, abroad namely (i) RITES AFRIKA (PTY) Limited, Botswana and (ii) RITES Mohwarean Arabia Company Limited (RMAC), Saudi Arabia.

   RMAC, a local JV Company was formed for carrying out the O&M work of North South Railway network of Saudi Railway Company, but due to insurmountable differences with the client, the operation contract has been foreclosed in June, 2011. The Company is under liquidation.

   Under the Guidelines on Corporate Governance for Central Public Sector Enterprises 2010, issued by Department of Public Enterprises in May, 2010, Subsidiary Company means only those subsidiaries, whose turnover or net worth is not less than 20% of the turnover or net worth of the holding company. No subsidiary of RITES comes under the ambit of above mentioned definition of Subsidiary Company. Hence, this is not applicable to RITES Limited.

11. Disclosures:

   During the year, there has been no materially significant related party transaction with the Directors, Management or their relatives that have a potential conflict with the interest of the company.

   Transactions with related parties as per requirements of Accounting Standard (AS-18) 'Related Party Disclosures' issued by the Institute of Chartered Accountants of India are disclosed in Note no. 2.33.

   The company has followed the Accounting Standards issued by the Institute of Chartered Accountants of India in the preparation of financial Statements.

   No penalties imposed or strictures passed against the company by any statutory authorities on any matters related to any guidelines issued by the Government during the last three years.

   There were no instances of non-compliance by the Company.

12. Means of Communication:

All important information pertaining to the Company is mentioned in the Annual Report of the Company containing inter-alia Audited Accounts, Directors Report, Report on Corporate Governance which is circulated to the members and others entitled thereto for each financial year. The annual accounts of the Company are made available on the website of the Company i.e www.rites.com. Compliance report of Corporate Governance is also being sent to Ministry of Railways on quarterly basis/yearly basis for onward submission to DPE.

13. Training of Board Members:

The New Directors appointed by the President of India are given formal induction and orientation with respect to Company's vision, strategic directions, core values including ethics, financial matters and business operations and risk profile of the business of the Company. The normal practice is to furnish a set of documents / booklets to a director on his/her joining the Board. This includes data about the company including its Brochure, Annual Report, MOU Targets & achievements, Memorandum and Articles of Association, Board Charter, CPSE guidelines on Corporate Governance etc.

14. CEO/CFO Certification:

The certification by Chairman and Managing Director (Chief Executive Officer) and Director Finance (Chief Financial Officer) was placed before the Board of Directors at the meeting held on 26.07.2016 (placed as Annexure-3 to this report).

15. Whistle Blower Policy

Whistle Blower Policy has been formulated and posted on the website of the Company.

16. Compliance

The Company complies with the requirements of the Guidelines on Corporate Governance for CPSEs 2010.

Certificate obtained from a Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated in the Guidelines is placed as Annexure - 4 to this report.

ANNEXURE-1

Attendance of Board of Directors Meeting during the year 2015-16

Note:

  - Meeting attended

NA Not applicable (not in position)

         -  Meeting not attended

ANNEXURE-2

DECLARATION BY CHAIRMAN & MANAGING DIRECTOR REGARDING COMPLIANCE WITH THE CODE OF CONDUCT BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL DURING THE YEAR 2015-16

I Rajeev Mehrotra, Chairman & Managing Director, RITES Limited do hereby declare that all the members of the Board of Directors and the Senior Management Team of the Company have affirmed their compliance of the Code of Conduct during the year 2015-16.

 Place: Gurgaon                                                                     Rajeev Mehrotra

Date: 19.05.2016                                                            Chairman & Managing Director

ANNEXURE 3

CHAIRMAN AND MANAGING DIRECTOR (CHIEF EXECUTIVE OFFICER) AND DIRECTOR FINANCE (CHIEF FINANCIAL OFFICER) CERTIFICATION

(a)   We have reviewed financial statements and the cash flow statements for the financial year 2015-16 and to the best of our knowledge and belief:

(i)    These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading,

(ii)   These statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable 

(b)   There are to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company's code of conduct.

(c)   We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of Companys internal control systems pertaining to financial reporting. We have not come across any reportable deficiencies in the design or operation of such internal controls.

 (d)  We have indicated to the Auditors and the Audit Committee:

(i)            That there are no significant changes in internal control system during the year,

(ii)          That there are no instances of significant fraud of which we have    become aware.

Rajeev Mehrotra                                                          Ajay Kumar Gaur                                                 

Chairman & Managing Director                                   Director Finance

(Chief Executive Officer)                                             (Chief Financial Officer)                                                                      

Place:

Date: 26.07.2016

CERTIFICATE

To

The Members

RITES LIMITED.

We have examined the compliance of conditions of Corporate Governance by RITES LIMITED for the year ended on 31st March, 2016 as stipulated in the DPE guidelines on Corporate Governance for Central Public Sector Enterprises issued by the Department of Public Enterprises, Ministry of Heavy Industries and Public Enterprises, Government of India.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statement of the company.

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of certification and have been provided with such records, documents, certification, etc. as had been required by us.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the guidelines on corporate governance issued by the Department of Public Enterprises except that

1.      During the period under scrutiny there was no Independent Director appointed by the Ministry of Railways on the Board of the Company.

2.      Due to non appointment of Independent Directors, Audit Committee was not constituted. It was constituted by the Board of Directors in their meeting held on 8th January 2016 comprising of Non-Indpendent Directors.

3.      Nomination, and Remuneration Committee, was not in position in the absence of Independent Directors.

However, adequate number of Independent Directors were appointed by The Ministry of Railways w.e.f. 01.04.2016. Audit Committee, Nomination & Remuneration Committee and CSR Committee were duly constituted by the Board of Directors in their meeting held on 3rd June 2016.

We further state that such compliance is neither an assurance as to further viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.                                                                                                                                          

 For Akhil Rohatgi & Co.

 Place: New Delhi                                                                       (Akhil Rohatgi)

 Date: 26th July, 2016                                                   Company Secretary in Practice

                                                                                                     F.C.S: 1600

                                                                                                   C.P. No. 2317                                                                         

MANAGEMENT DISCUSSION AND ANALYSIS

This   analysis   report   briefly   describes   about   the   company, industry, present business environment and ability to avail opportunities, leverage strengths, handling of threats/ weaknesses, financial performance, internal controls and other related issues.

I.  ABOUT THE COMPANY AND THE INDUSTRY

RITES Ltd.is a Miniratna, Schedule-A, Category-I CPSE, and ISO 9001certified organization. RITES is a multi-disciplinary engineering and consultancy organization providing diversified and comprehensive array of services from concept to commissioning in all facets of transport infrastructure and related technologies. The major business engagements as consultants, engineers and project managers are in railways, highways, airports, ports, ropeways, urban transport and inland waterways in India and abroad. The company also provides services of third party inspection, quality assurance, construction supervision & project management, operation & maintenance, leasing and export of rolling stock. In recent years, the company has diversified into the field of renewable energy such as solar and wind energy and modernization of railway workshop projects on turnkey basis. The company has been involved in the development of transport infrastructure for the last 42 years and has been an important transport infrastructure contributor in nation building in the country. The company enjoys a key position in conceptualization of transport infrastructure plans for the Government of India and for a number of foreign Governments. The company has experienced management and technical personnel to provide innovative solutions to the clients requirements. With the track record of successfully handling of a number of projects in infrastructure in India and abroad, RITES has earned its reputation as The Infrastructure People. RITES has wide international experiences in over 55 countries, including those in South East Asia, Africa, Gulf region, etc.

The Twelfth (12th) Five year plan of the Government of India underlines the need for a steady growth in GDP, supported by robust infrastructure development across sectors. Currently Indias infrastructure spending is about 8% of GDP, which is required to augment further to sustain economic growth. Focus has been accorded on liberalization of FDI norms, execution of infrastructure projects via Public Private Partnerships (PPPs), fiscal incentives, tariff policies, budgetary allocations and capacity building.

Indian economy has consolidated the gains achieved in restoring macroeconomics stability from the beginning of Fiscal Year 2015. The cumulative effects of ongoing and planned structural reforms should continue to add to the supply capacity of the economy and boost long run growth. Budget for the year 2016 has addressed the infrastructure sectors constraints and pursue reforms. It has provided a renewed impetus to the infrastructure sector including rail, roads, ports and aviation and the allocation stands at Rs. 2.21 lakh crore with major thrust on Railways and Highways. Further, Make in India program includes major initiatives desired to facilitate investment, faster innovation and built best-in-class manufacturing infrastructure.

The renewed focus on infrastructure investment in India is opening up new hopes and opportunities for growth of companies like RITES. With positive scenario for railways and other infrastructure investments, RITES is poised for a sustained growth in the coming years

II.    STRENGTH AND WEAKNESS

RITES is recognized as a well-established organization with a good track record endowed with a large pool of highly qualified and experienced technical personnel and ability to take up projects requiring multi disciplinary work. RITES has extensive experience in working with multilateral funding agencies & other international organizations. It has high international visibility and reputation earned through work experience across the globe harnessing relevant technology for projects including the state-of-art technology. RITES continues to remain the provider of one-stop solution to the transportation and infrastructure needs of the country especially in high technology areas such as heavy haul, high speed rail, metro rail, long span bridges and tunnels and ensure quality & timely delivery of projects.

Inability to prevent staff attrition and recruit desired competencies results in manpower resource constraints. This adversely affects the performance and development of strategic business units (SBUs)/ Divisions. RITES also needs to further enhance its expertise to manage/handle mega projects.

III.   OPPORTUNITIES AND THREATS

Major investments are expected to be made in the coming period in the infrastructure sector, both in the transport and non transport sector, offering scope to strengthen RITES position in existing areas and explore/develop new areas of business. With positive scenario for railways and other infrastructure investments, the Company is poised for a sustained growth in the coming years. Indian Railways envisages an investment of INR 8.5 lakh crore in the next five years. 100% Foreign Direct Investment (FDI) in the railway infrastructure segment has been allowed recently which has opened up opportunities for participation in rail sector.

Intense activity in the transport Infrastructure sector is expected to yield strong demand for consultancy and project management services in areas such as ; Dedicated Freight corridors, High Speed Passenger corridors, modernization of workshops &expansion of rail network in North-East region, J & K,  mineral rich states and last mile connectivity for ports; railway sidings, In-plant track & related facilities both for setting up of new units & capacity expansion of existing units in thermal power, steel and port sectors; metro rail, regional rail/rapid transit systems in various cities; up-gradation &development of National Highways and State Highways under NHDP, road safety audits, detailed engineering for bridges and tunnels; development of Infrastructure in Multi-Product SEZs, logistics and industrial parks along industrial corridors/golden quadrilateral; development of feeder airports and airports in North-East region, heliports, airport technical audits and development of green field and brown field projects pertaining to major and non-major ports, PMC of ports and IWT projects.

There is a threat from increasing competition from wide range of players viz. PSUs, Indian companies, International consultants and small groups of consultancy firms. The scale of projects being tendered is becoming larger attracting international/large Indian companies putting a squeeze on RITES chances of grabbing business. Getting  out priced particularly due to low quote in non-QCBS tenders involving small domestic consultants and foreign consultants utilizing foreign experience and local staff also pose a threat to the business. Loss of experienced personnel to multinational companies, JVs with foreign consultants and private sector organizations who are offering attractive financial packages is also a big threat for the company. RITES being a CPSU has limitations in offering competitive package to certain key experts.

IV. RISKS AND CONCERNS

Several projects have been held up in the infrastructure sector due to poor market conditions, lack of promoter interest, inability to acquire timely regulatory clearances and land, lack of funds and difficulty in obtaining credit/funds for infrastructure projects. Further, business is becoming more sophisticated and clients are increasingly putting a price tag on reliability and quality of service. As a Government Organization has limitations in hiring staff in the field of new technology. Similarly there is limitation in firing of personnel with outdated knowledge.

RITES continued to have an upper hand in the market concerning preparation of feasibility studies/DPRs, detailed engineering etc. for railway sector. However, RITES faces competition in the field of O&M and PMC services from small players. RITES also faces competition from foreign players in key areas of railway infrastructure.

Market dynamics indicate that growth in  consultancy will be below par in the sense that clients prefer to engage a single agency who will do the design, engineering, construction and commissioning of projects, especially for projects with proven/standard design such as ROBs/RUBs, railway sidings, city/municipal roads, etc. Thus, there will be a need to revise approach towards business openings by offering services on turnkey basis, i.e., from concept to commissioning including consultancy. However, turnkey projects fetch lower margins than consultancy, while having higher risks, and require capital deployment from the companys resources.

In view of increased globalization and opening up of cross border businesses, there is a greater risk of competition from foreign companies in consultancy projects. RITES global operations are exposed to international legal, tax and economic risks.

The business of export of rolling stock is cyclical in nature and largely dependent on lines of credit offered by GOI to various countries in Asia and Africa 

The companys employees and projects are exposed to various kinds of risks including risk of life in some dangerous geographical areas in India and abroad. Therefore, the company takes necessary steps to mitigate such risks by taking insurance policies and protecting lives. Foreign currency risk also exist which are managed through hedging measures.

V.  INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

RITES has effective internal control and audit systems for maintaining efficiency in operations and compliances of applicable relevant laws and regulations. The organization has well structured policies and guidelines, which are well-documented with pre-defined powers to facilitate execution of business. Detailed Finance &Accounts Manual is already in place to guide and strengthen the internal checks and controls.  Experienced professionals firms and in-house audit team headed by qualified personnel are conducting regular and exhaustive internal audits.  The internal control and audit systems are being reviewed periodically by the management.  Corrective & preventive measures, whenever necessary are being taken up from time to time as a part of continuous improvement system.

Detailed guidelines on construction project management are in place & reviewed constantly by contract policy cell. Legal cell of the company facilitates to further improve due diligence process for diverse nature of contracts / agreements entered into with various clients / venders / partners. Checks and controls are also ensured through in-built authorization/validation process and audit trail established in SAP-ERP.

Risk Management System

A Risk Management system is already in place in the company. Framework covers areas of risk, identification and solution to mitigate the effect of risks.

Treasury Risk and Liquidity Management

Execution of foreign projects gives rise to currency variation risk. For this purpose, the company regularly monitors exchange fluctuations to mitigate this risk. The company has a sound currency risk management policy in place. Policy covers various aspects of currency risk management, benchmarking, hedging and risk appetite, permissible instruments, structure of the risk management committee and treasury group, reporting procedures etc.

For control and directions of operations pertaining to currency risk management, the company has a committee and an external consultant. Actions taken are informed to the management periodically.

The company has continued to optimize its surplus funds by adhering to efficient decision process of investing its surplus funds in deposits with banks, mutual funds and corporate bonds within the framework and guidelines of government bodies, Department of Public Enterprises (DPE), Companies Act 2013 and those approved by BOD. There is an investment committee of the Board of Directors, which approves investments and reports to the Board periodically.

The company has been affirmed IND A1+, the highest short term rating for its non fund based working capital limits by India Ratings & Research (erstwhile Fitch Ratings). This rating helps the company to get non fund based facilities at more attractive terms.

VI. FINANCIAL PERFORMANCE

 RITES has crossed all previous records of turnover and profits so far. The company has secured a highest ever total income of Rs.1294 crore compared to Rs.1166 crore in the previous year. Similarly, highest ever profit after tax is Rs.339 crore against Rs.306 crore in the previous year, higher by 10.8%. The strong focus on business development has taken RITES order book to Rs. 2,323 crore, which is also the highest so far. During the current financial year, the company has achieved an operating turnover of Rs. 1087 crore as against 1015 crore of previous year, which is higher by 72 crore. The net-worth has increased from Rs. 1628 crore to Rs.1803 crore. The company has spent Rs. 8.28 crore (0.76% of operating turnover) towards corporate social responsibilities during the year.

VII. SEGMENT-WISE PERFORMANCE

During the year, consultancy services including quality assurance services contributed

70% of the total operating income, export sales contributed 17%, leasing income contributed 9% and balance 4% was contributed by turnkey construction projects. A segment-wise comparison is given below:

OPERATIONAL PERFORMANCE

VIII.     BUSINESS OUTLOOK

RITES is a key partner to the clients in building world class infrastructure. It has continued its presence in transport and urban infrastructure consulting domain and other areas of operations viz. turnkey works of construction & upgrading / modernization of railway workshops and wet leasing of locomotives in domestic markets. RITES is the market leader in the railway sector and will continue to attract sizeable business both from the Indian Railways (IR) and the Non-IR clients.

The Government has been investing in up-gradation of the transport infrastructure with the aim of capacity addition and technology infusion. The Government has announced an increase in total outlay for financial year 2016-17, which stands at Rs. 2.21 lakh crore, for infrastructure as it is the key driver to accelerate the growth momentum.

PPP projects in area of port and mine connectivity, gauge conversion, last mile connectivity and production of rolling stock have started coming up. Intense activity in the infrastructure sector is yielding a strong demand for consultancy and project management services. RITES is entering into railway concession in India to be taken on PPP basis. RITES plans to take upto 26% equity stake for such projects and a proposal for same is under consideration of Ministry of Railways. In India, the wet leasing of locomotives has been well received by non-railway customers.  Thirty three locos have been leased out so far to various domestic clients in port, coal and power sectors, giving a regular stream of revenue to RITES.

Through pro-active role that RITES plays, it strives to achieve growth by capitalizing on massive infrastructure development planned by the Government through extensive business development, which accelerates the development process towards rail and road connectivity projects in the region. The steps include special emphasis on monitoring of the infrastructure projects to ensure qualitative and timely execution of projects.

RITES commitment, drive and mission continue in the ever-changing economic landscape and in shaping itself for delivering mega transportation projects. The in-depth analysis and leverage to the skills have enhanced RITES capabilities to meet futuristic challenges in railways workshop modernization, rail infrastructure connectivity projects, integrated check-posts, logistic parks & smart cities.

OVERSEAS BUSINESS

RITES provides technical and management support for railway operations to foreign countries. It exports locos, coaches and wagons to various countries and undertakes leasing of rolling stock, rehabilitation and maintenance services for the same.

RITES signed their biggest export order to supply 120 BG LHB coaches to Bangladesh in FY 2014-15 and a part delivery for this contract; two rakes consisting of 40 coaches has been made during the  current year. RITES secured a major contract from Myanmar Railways for supply of 18 meter gauge 1350 HP diesel electric locomotives with several modern features. 

RITES has secured consultancy services for feasibility study and design for development of new airfield at Gabiro in Rwanda and construction of cargo complex, construction of parallel taxiway and modification of old terminal to departure terminal in Paro International Airport, Bhutan.

During the year, RITES provided overseas consultancy services for supervision & up-gradation to paved road standard of existing roads in Terai Region of Nepal. Further, RITES also handled projects for leasing and maintenance of locomotives in Mozambique and supply of MG ALCO locomotives to Senegal apart from warranty servicing and support activities in Bangladesh, Myanmar and Sri Lanka.

The locomotives leased by RITES to CFM/ Mozambique continued to operate throughout the year. The contract was further extended for two years till August, 2017. The fleet of sixteen locomotives including one locomotive of 3000 HP, one locomotive of 2300 HP and fourteen locomotives of 1350 HP are operating on lease arrangements at two different locations in Mozambique; Maputo and Beira. During the year, RITES was able to reach settlement with the Government of Mozambique (GoM) in respect of a rail concession in Mozambique where serious disputes existed. With this, there is renewed possibility of doing more business in future with GoM.

The Asian and African regions, the key overseas markets of RITES, are likely to witness significant investments in the infrastructure sector in coming period.

DOMESTIC BUSINESS

On domestic front, RITES has been involved in development of transport and urban infrastructure and has been an important contributor to the planning and development.

In a major scenario change, RITES has succeeded in getting railway projects for execution on EPC basis. Recently, RITES has been sanctioned two projects from railways namely Gooty Dharmavaram Doubling in South Central Railway Route length ( 90.2 kms) and Pendra Road Anuppur third line in South East Central Railway  (50.1 kms).

During the year, RITES has taken up an important project at Vidisha on turnkey basis for manufacturing of traction alternators, which will be an import substitution product for the Indian Railways. The factory is being set up in line with the Make in India initiative of the Prime Minister.  RITES has also completed setting up of the state-of-the-art Kulti wagon factory, a JV of RITES and SAIL, a Make in India initiative of the Indian Railways. An assured Off-take Agreement has also been signed with Railways.

RITES has been associated with studies for Dedicated Freight Corridors (DFC) of about 10,000 km length since 2005. Based on RITES study, projects of Eastern Dedicated Freight Corridor of 1,856 km from Dankuni to Ludhiana and Western Dedicated Freight Corridor from Dadri to JNPT of 1504 km are already in the stages of implementation. Further studies for North-South, East-West and East-Coast corridors have been completed while that for the Southern Corridor from Chennai to Goa is in progress. In addition, the renovation of the National Rail Museum undertaken by RITES, was well appreciated by the Railway Ministry and by the visitors.

In its core area, RITES has also developed rolling stock design for high capacity milk van and high speed broad gauge self- propelled accident relief train for Indian Railways. Further, RITES is providing comprehensive consultancy services for a prestigious project to N.F Railway for constructing a rail-cum-road bridge of length 4940 m across river Brahmaputra and Jubilee bridge on Bandel-Naihati section of Eastern Railway. Study for three major High Speed Railway (HSR) projects was also undertaken during the year.

Rail connectivity projects are being up taken up in steel, aluminum, power, mining and port sectors. RITES continued to get PMC work for rail connectivity projects of NTPC, Coal India etc. RITES is recognized as one- stop solution provider in respect of operations and maintenance of railway sidings for non-railway customers.

An MOU has been signed with Coal India Limited for project management consultancy from concept to commissioning minimizing time in completing processing formalities with a target to achieve 1.0 billion tons of coal by year 2020 from the existing level of 0.5 billion tones.

RITES has remained associated with countrys key metro rail projects like Delhi, Bangalore, Ahmadabad and Nagpur. RITES has completed feasibility study & DPR for metros in Kochi, Patna, Guwahati, Kanpur, Varanasi, Agra, Lucknow & Chennai Metro. In future, there is huge potential of growth in this area. In recent engagements, RITES is engaged with the detailed design consultancy for six elevated metro stations for Metro Link Express for Gandhinagar, General Consultancy for Ahmedabad and feasibility study for high-speed rail corridor between Delhi-Chandigarh-Amritsar.

In areas of quality assurance, RITES has enhanced its earning through diversification in new areas of in-plant inspection at Rourkela Steel Plant and stage inspection of coaches & locomotive engine blocks at ICF & DMW respectively. Further, new avenues of inspection have been opened with the commencement of rail &track Item inspections for DMRC & DFCCIL.

In the airport sector, the Ministry of Civil Aviation (MOCA), through AAI has engaged RITES to prepare conceptual landside multi-modal transport integration plans for passenger and freight movement at the six metro airports of India. RITES has also secured contracts for PMC for construction of bunkers at 5 different locations from Bharat Electronics Limited; Greenfields airports in Kushinagar,  Singrauli and Gwalior and Integrated Check Posts for MHA at the International Borders. Further, the Petrapole ICP project executed by RITES at Bangladesh Border, which handles the highest trade for India by road, was opened recently for goods and passenger services.

As a turnkey project, the company completed a modern bus terminal project at Maltipatpur, Puri for the Odisha Government. In material system management area, RITES has signed a new contract with NACO, MOH&FW for a period of two years to provide procurement consultancy services.

RITES has recently completed its first concessionaires detailed engineering design for Hyderabad Vijayawada, executed under DBFOT basis by NHAI.

Further, RITES continued to maintain its firm position by providing project management and design consultancy for development/ expansion/up-gradation of buildings of apex educational and research institutes, institutional and office complexes, industrial buildings, etc.

In a very strategic development, RITES and the Indian Railways promoted a Joint Venture Company called Railway Energy Management Company Ltd. (REMCL) for renewable energy projects, bilateral purchases, power trading and energy efficiency projects etc. in a record time of 10 months, it commissioned 26 MW Wind Mill in Jaisalmer.

REMCL implemented several power procurement contracts for the Indian Railways under the Open Access Policy of the Electricity Act, 2003, resulting in annualized saving of Rs. 1,500 crore to the Indian Railways. This has been made possible only by commercial and legal arrangements and without any investments.

REVIEW OF BUSINESS UNITS/ DIVISIONS

Major projects secured and executed during the year in foreign and domestic segments by various business units are covered below:

RAIL INFRASTRUCTURE DIVISION

Railway infrastructure division provides consultancy in transportation & economics, electrical engineering, signal & telecommunications, Project Management consultancy for Dedicated Freight Corridor, track & survey, geo-technology, civil engineering design through conceptualization, design and project management of rail based transportation system. This division operates through a number of Strategic Business Units (SBU) at Corporate Office.

TRANSPORT & ECONOMICS  UNIT

T&E unit plays a pivotal role in the domain of transport logistics planning, traffic assessment, modal integration and project financial and economic appraisal.

Unit is carrying out a prestigious World Bank funded International Project on Development of 50 years National Transport Master Plan for Kenya. The unit has successfully completed the project pertaining to railway connectivity to Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RRVUNL) thermal power plant at Banswara and Odisha UMPP at Sundergarh.

The unit is engaged in preparation of a feasibility project report for development of a computer based transport model for optimal movement of fertilizer on behalf of the Government of India. The other assignments include projects secured from RRVUNL for rail connectivity to their super critical thermal power project at Kalisindh (Raj), feasibility study including DPR for rail connectivity for thermal power projects of 2?60MW each at Chhabra and Suratgarh.

ELECTRICAL ENGINEERING UNIT

The unit provides project management consultancy services, quality assurance and surveillance inspections in the field of railway electrification, electric substations, building electrification, air conditioning, illumination systems, installation of lifts, standby power supply arrangement / DG sets, rural electrification etc.

Presently, the unit is executing PMC works of railway electrification of sidings for various clients e.g. TISCO, DFCCIL, SAIL, NTPC, SCCl, BCCL, SECL, MUNCL & RINL. Other works include solar installation and associated sub-stations for clients like CONCOR. The unit is endeavoring to enter new area like the main line railway electrification and designs of high speed lines.  

Further, the unit continued to provide project management consultancy services to SAIL, RINL, TISCO and NTPC for electrification of rail sidings, consultancy services for third party audit/inspection of electrified villages under Rajeev Gandhi Gramin Vidyut Yojna. This unit is also taking up electrical part of works of various Railway Project undertaken by RITES.

SIGNALLING & TELECOMMUNICAITONS UNIT

The unit is providing consultancy & construction management services in the sphere of signaling in India as well as abroad mainly for power plants, cement plants, steel plants, refineries, port trust, coal sectors etc. The scope of work ranged from concept to commissioning of the modern signal & telecommunication projects including post operation & maintenance services. The unit is handling the prestigious projects of signaling design, video conferencing/surveillance and also entered into new field of consultancy assignment of highway traffic management system for National Highway Authority of India.

During the year, the unit has completed Project Management Consultancy (PMC) works of CSPGCL at Marwa, NTPC at Talcher, In-plant Yard at Mouda, R&D yard at Simhadri, and NCC Yard of Rourkela Steel Plant.

Project management consultancy works under execution include NTPC (Mauda, Simhadri), Tata Steel (Kalinganagar), Rourkela Steel Plant (Rourkela), Bokaro Steel Plant (Bokaro Steel city), CSPGCL work at Marwa, MPPGCL work at Khandwa, and MSPGCL work at Chandrapur. This unit is taking up signaling part of works of various Railway Project undertaken by RITES.

The unit has secured S&T work of additional line connecting Kaniha Mines to TSTPS, detailed engineering for installation of latest S&T system at Jayant station & MGR workshop, construction of railway line from SRP & RKP Group of Mines up to STPP, Jaipur, Adilabad, Telangana and PMC for Wagon Tippler Siding at JNSTPP at Nigrie, Singrauli.

TRACK & SURVEY UNIT

This unit primarily focuses on planning various stages of railway development. It starts with pre-feasibility and feasibility studies to preliminary engineering-cum-traffic studies, final local surveys, detailed project reports, detailed engineering and bid documentation. Projects include green field railway lines for mixed traffic, doubling/tripling/quadrupling of existing lines, high speed railway lines, heavy haul lines and port connectivity lines for bulk material transport.

During last year, studies for three major High Speed Railway (HSR) projects were handled by this Unit. The first was the proposed HSR line between Mumbai and Ahmedabad having a length of about 508 km, which was entrusted by JIC Consortium of Japan. The scope included satellite data procurement and study followed by survey, alignment and bridge study. The second was pre-feasibility study for 460 km long HSR between Delhi and Amritsar, entrusted by High Speed Railway Corporation (HSRC). The third is the Feasibility Study for 1,300 km long HSR between Mumbai and Chennai, which is part of the proposed Diamond Quadrilateral network of HSR Corridors.

Preliminary engineering-cum-traffic study for two proposed dedicated freight corridors of heavy-haul railway was executed. The East Coast corridor (1,122 km) study between Kharagpur and Vijayawada was completed. The other study of Southern Corridor (885 km) between Chennai and Goa is under progress.

GEO TECHNOLOGY UNIT

This unit provides consultancy services in engineering geology, soil/rock mechanics, geophysical survey, ground water and allied fields including diamond core drilling of exploratory bore holes, in-situ and laboratory tests etc. Unit has earned recognition as a prime organization that provides total consultancy for complete geotechnical/geological/geophysical investigations.

The unit is also well equipped with latest state-of-the-art machinery, exploratory drilling equipment (capable of drilling through all type of geological formation up to a depth of 400 m. below natural ground level) and related software.

The Unit is presently providing consultancy for Katra - Dharam Rail line project in J&K, Byrnihat Shillong New BG Rail Link Project in Meghalaya, 4 corridors of DFC, Chennai Metro Project etc. During the year, this unit was awarded the work of Byrnihat Shillong new BG Rail Link Project by N.F. Railway.

DEDICATED FREIGHT CORRIDOR SEPCIAL PROJECT UNIT

This unit is providing PMC services for construction of double line electrified track and related infrastructure for Western Dedicated Freight Corridor for Ph-1, Rewari Vadodara section (approx. 922 route kms) as a consortium member of NK consortium (consists of Nippon Koei Co. Ltd, Oriental Consultants Co. Ltd, Japan Transportation Consultants Inc, Nippon Koei India Pvt. Ltd. and RITES Ltd.) and Ph-2, Rewari Dadri and JNPT- Vadodara section (approx. 555 route Kms) as a consortium member of OCG consortium (consists of Oriental Consultants Global Co. Ltd, Oriental Consultants India Pvt. Ltd, Nippon Koei Co. Ltd, Nippon Koei India Pvt. Ltd and RITES Ltd.)

CIVIL ENGINEERING DESIGN UNIT

The unit provides engineering design services involving planning, investigation, design, bidding documents and designer support during construction for rail bridge, rail-cum- road- bridges, road over/under bridges, approach structures like rail/road viaduct, suspension bridge, cable stayed & extra dose bridges on various modes of operation including PPP & EPC etc. It also provides consultancy for river engineering works involving hydraulic model studies, design of river training, protection measures, detailed design & construction supervision services for various road & rail tunnels.

Design, designers association services and hydraulic model studies during construction are being provided for Rail cum Road Bridge over river Brahmaputra at Bogibeel near Dibrugarh, Assam for NF Railways. This state of the art bridge, 4.94 Km long, comprises of 125 m long fully welded composite steel truss is declared as National Project.

DPR for construction of 3 important bridges across rivers Gowthami (3.5 km long), Vyantheya (1.55 km long) and Vasishtha (1.3 km long) on proposed railway line from Kotipalli to Narsapur in Andhra Pradesh for SC Railway are under progress.

Preparation of feasibility report for construction of 2.8 km long 6-Lane Road Bridge with a combination of Cable Stayed (325m) and Extra dose (140m) spans, and provision of 2- Lane Metro Track over River Brahmaputra near Guwahati, Assam for PWD-Guwahati, proof checking services for 8 ROBs on Hyderabad Metro and river morphological analysis and design of river training & bank protection work in Uttarakhand state are also in progress.

"Detailed engineering including designers support during construction of 17 ROBs on GZB-MGS section of Eastern Dedicated Freight Corridor for DFCCIL" and "Consultancy services for detailed design engineering and preparation of DPR for a dedicated corridor for old, differently abled persons during Kumbh and Magh Mela at Sangam, Allahabad (UP), India " have been recently under taken by the unit.

Recently completed consultancy projects by Unit include Rail Bridge (0.97 km long - 64.5m Span) across river Kosi on Katareah Kursela section of EC Railway and project advisory services for 9.76 Km long (123 m Span) 6 lane extra dose green field bridge project over river Ganga at Patna for BSRDCL on EPC mode with ADB funding. These recent projects have moved the unit significantly up the value chain in its business portfolio.

Consultancy services for detailed design and construction supervision for 3.3km long Tunnel No.10 on Jiribam - Tupul section of new railway line project in the state of Manipur are also being provided for NF Railway under joint venture with M/s Geo-consult, Austria.

REGIONAL PROJECT OFFICES (RPOs)

North, New Delhi- This unit covers Haryana, Punjab, Rajasthan and other northern states and provides consultancy services for preparation of detailed project reports (DPR), detailed engineering & project management, including planning and design for projects of flyovers, roads, railway sidings and inland containers depots in the northern region of the country. Major works consists of PMC & DPR for providing additional facilities, modification of existing ICD and planning for new ICDs for CONCOR at various locations in the Northern India.

Recently, an MOU has been signed with the South Delhi Municipal Corporation for providing third party inspection of buildings & infrastructure works at different location in South Delhi. In addition, this unit is also providing PMC for construction of five underpasses including recently awarded two underpasses at NOIDA. This unit is undertaking EPC construction of Pendrda Road -Anuppur 3rd line for Indian Railways.

Lucknow- This unit has works in areas covering Uttar Pradesh and a part of Bihar and Madhya Pradesh.  Unit provides services from concept to commissioning viz: consultancy, design and drawing, project management, procurement & quality assurance for development of projects in the field of rail infrastructure.

The major works in hand include rail connectivity to power plants at Nabinagar and Meja.  It has also bagged a prestigious work of third party inspection for Signature Building (for UP Civil Services), Lucknow. 

During the year, Anpara-D unit of UPRVUNL has been commissioned successfully. The unit has also entered into an MOU with UPRVUNL for all their upcoming projects. Accordingly, rail Infrastructure works for new power plants at Etah and Karchhana have been awarded apart from Panki, Obra and Harduaganj. Similarly, NTPC has also awarded work at Tanda and Unchahar power plants.

Nagpur- This unit covers Maharashtra, a part of Chhattisgarh and Madhya Pradesh. It has executed major project management consulting assignments in the area of construction of road over bridge & foot over bridge on Howrah-Mumbai main line Bilaspur (C.G); design and construction of 6 lane cable stayed bridge, Nagpur; Installation of B.G. rail transportation system from Bir to SSTPP plant at Khandwa (M.P) and construction of railway siding for CSPGCL Marwa TPP.

Some of the major milestones achieved by this unit include completion of girder launching in all respect, including railway portion. Further, during the year consultancy services were provided for two ROBs at Kesharbagh. During the year, major projects secured include PMC services from MPPGCL for construction of converting existing stabilizing line to engine escape line on new track hopper siding, construction of road over bridges at PWD Raipur, consultancy services from GRBCD-Nagbhid for construction supervision of railway portion of tunnel and construction of proposed Godazari-Branch Canal.

Secunderabad This unit covers southern part of India viz. Tamil Nadu, Karnataka, Andhra Pradesh, Telangana and Kerala and provides rail infrastructure related consultancy services, maintenance and project management services for rail infra works, building works etc. Unit serves various clients from central/ state departments & PSUs.

Major milestones achieved during the year include commissioning of Phase II of multimodal logistic park at Visakhapatnam and Vallarpadam for CONCOR and tendering process for development of railway line for Singareni  Colleries Power Plant in Telangana. The unit also completed PMC works from M/s BPCL for proposed railway siding at Desur depot.  Further, the unit secured other major work orders PMC and DPRs for Chennai Port, Ennore Port, VOC Port and Colachel Port. This is responsible for EPC construction of doubling of Gooty Dharmavaram of SC Railway.

Kolkata-This unit covers eastern part of India viz. West Bengal, Jharkhand, part of Bihar and the North East. It provides consultancy services for development of rail infrastructure of different industries, steel, power and mining sectors belonging to various clients in central/ state government departments and PSUs.  This unit has diversified and developed expertise in infrastructure projects like water work projects of civil authorities, namely KMC, KEIP, KMDA.

This unit has also diversified in preparation of detailed engineering work of oil gantry modification of IOCL and development and building of factory sheds of wagon manufacturing at Kulti, RCF bogie factory of the Indian Railways at Budge-Budge.

In addition, this unit has also undertaken various beautification works of river front and development of museums, multifunctional complexes, box pushing and pipe jacking below running railway track.  Unit has signed a MOU with McNally Bharat Engg. Co. Ltd., for development of rail infrastructure including CHP, wagon tripler, rapid loading system, etc. on EPC basis.

Bhubaneswar- This unit covers South-Eastern part of India viz. Odisha and also part of Andhra Pradesh. The unit is generally involved in developing rail infrastructure for different industries, like steel, aluminum, power and mining sectors of NALCO, MCL, RINL, SAIL, CONCOR, Visakhapatnam Port Trust (VPT), TATA Steel, and TATA Power. This unit has diversified and developed expertise in infrastructure projects like box pushing and over bridge on railways running main line. Unit is also providing PMC services for construction of research center of Institute of Life Science (ILS). The unit has got total in-house expertise in preparation of FSR & DPR for rail infra projects.

Raigarh - This unit is came in existence recently in July 2015 especially for handling works in areas covering a part of Chhattisgarh and Odisha States. The unit has got complete in- house expertise for taking up rail infra project at inception stage on concept to commissioning basis. The unit provide services related with the development of railway infrastructure for different industries in power, steel & mining sector. Currently this unit is providing consultancy services to two mega projects: preparation of DPR & construction management services for NTPC-Lara, near Raigarh for a double line MGR of 67 KM and services as owner engineers for OPGC MGR at Banharpalli for a single line MGR of 45 KM.

During the last 6 months, this unit has completed the DPR works of NTPC-Lara duly approved by the Indian Railways & tendering for works is under progress. OPGC-MGR work has been awarded to agency on EPC contract basis & construction activity is under progress. This unit expects to get works in mining sector in Odisha & Chhattisgarh.

BUILDING AND AIRPORT DIVISION

This division has three strategic business units namely construction project management unit, airport unit and architecture and planning unit.

CONSTRUCTION PROJECT MANAGEMENT UNIT

The unit is involved in project management services with construction of institutional, commercial and residential buildings along with third party inspection of infrastructure work.

The unit has expertise, resources and technical competence to undertake projects management consultancy from concept to commissioning which includes preparation of CPR / DPR, estimates, tendering, execution, budgetary management, quality assurance etc. Besides project management consultancy services, this unit also carries out third party inspection, technical audit, quality surveillance of building works, UG reservoirs, over head water tanks, roads, expressways, bridges & flyovers, external electrification, development works like sewers, drains and water supply lines.

The major works under execution for project management consultancy services include police stations & residential quarters for Delhi Police at 13 locations, school buildings, hostels & other infrastructures of Navodaya Vidyalaya Samiti (NVS) at various locations in India, academic complex for various universities such as JNU at Delhi, DU (North & South Campus), Central University at Pondicherry, Gaya (Bihar), Kerala, Gulbarga (Karnataka), University of Allahabad, Guru Ghasidas Vishwavidyalaya Campus (GGV) at Bilaspur (Chhattisgarh), IIT Kharagpur,NIT Campus at Shillong. The unit is also providing PMC services for Marketing Development cum Business Park (MDBP) for NSIC at New Delhi, 1200 seated auditorium / convention centre at National Agriculture Science Centre at New Delhi, unified academic campus of Bose Institute Kolkata and National Agri Food Bio Technology Institute at Mohali, multi modal logistic parks at Kathuwas (Rajasthan) and Pant Nagar (Uttarakhand) in addition to various container depots of CONCOR.

The major works of third party inspection have also been undertaken for building and infrastructure works related to NOIDA, Greater NOIDA, HUDA, DDA, Delhi Jal Board and Border Fencing and Roads for Ministry of Home Affairs.

AIRPORT UNIT

This unit has achieved new peaks and secured prestigious assignments in India and abroad during the year. The unit secured consultancy services for the feasibility study and design for development of new airfield at Gabiro in Rwanda and construction of cargo complex, construction of parallel taxiway and modification of old terminal to departure terminal in Paro International Airport, Bhutan.

In India, it secured the consultancy services for development of greenfield airports at Bhogapuram (International), Dagadharti, Oravakallu, Kuppam, Tadepalligudem in Andhra Pradesh, Kothagudem in Telangana, development of existing airports at Gulbarga, Shimoga in Karnataka and Balurghat in West Bengal. The unit was also entrusted with the prestigious studies for setting up air cargo hub at Delhi and Chennai by Ministry of Civil Aviation and preparation of a business plan for development of Air Cargo at AAI owned airports by Airports Authority of India. The unit also secured consultancy services from AAI for landside development at Lucknow, Tirupati and Raipur Airports.

During the year, the unit secured a very prestigious assignment of a project management consultancy for construction of EMP protected hardened structures at 5 locations for Bharat Electronics Limited. The PMC projects secured during the year also include development of airports at Chitrakoot, Kanpur and Kushinagar in the state of Uttar Pradesh.

In the field of pavement evaluation by non-destructive testing using heavy weight deflectometer, the unit is undertaking evaluation of PCN for runway 10-28 at IGI Airport Delhi for Delhi International Airport Pvt. Limited (DIAL).

The ongoing assignments include PMC for expansion of airstrips at Shravasti, Palia, Integrated Checkposts at Birgunj, Jogbani, Biratnagar along Indo-Nepal border, Petrapole and Dawki along Indo-Bangladesh border, Moreh along Indo-Myanmar border. The engineering consultancy assignments for expansion of Shimla Airport, Pantnagar Airport, greenfield Airports at Singrauli, Gwalior, ICP at Nepalgunj and Bhairahwa are in progress while PMC for expansion of Pithoragarh airport has been completed.

RITES signed a Memorandum of Understanding with Air India for providing technical assistance in the area of business plan and development of infrastructure for Air India.

ARCHITECTURE & PLANNING UNIT

The unit provides design consultancy for institutional and office complexes, transport terminals, housing, educational campus, hospitals, industrial buildings, workshops, etc.

Projects secured during the year include checking of design and drawings of Tilak Nagar Hospital for South Delhi Municipal Corporation; detailed engineering for development of new ICD at Barhi; additional work for detailed engineering work for development of MMLP at Quila Raipur near Ludhiana, Punjab; additional work in architectural & design consultancy services for proposed trans-disciplinary academic building at JNU campus, New Delhi and other miscellaneous works of administration building at ICD-Moradabad, CHA building at ICD-Agra, additional construction of boundary walls/retaining walls at ICTTuglakabad etc.

Consultancy for expansion of IGNOU campus at Delhi and construction of 100 Type-V quarters at AIIMS Rishikesh are in progress.

TRANSPORT INFRASTRUCTURE DIVISION

This division has two strategic business units namely Port & Water Resource (PWR) & Highways

PORTS AND WATER RESOURCES UNIT

This unit provides consultancy services for ports and harbours, water resources engineering and inland water transport (IWT) and has secured six prominent projects in these fields during the current year. These include two prestigious consultancy projects of preparation of techno- economic feasibility study for developing greenfield port at Narsapur and Ramayapatnam in Andhra Pradesh Coast, field investigation assignment works for proposed green field port at Bhavanapadu, Andhra Pradesh and study for effective utilization and disposal of dredged materials in Hugli estuary from Kolkata Port Trust. Further, Paradip Port has appointed this unit to conduct independent engineer services for development of multipurpose berth to handle clean cargo including containers on BOT basis. This unit has also been awarded the design of coast guard jetty from Indian Navy. The design review and proof checking of berth structure at Kakinada Port is successfully during the year.  While the land use plan study for VOC port, DPR for capital dredging at Paradip Port have been completed successfully, the studies for land use plan for Paradip Port, land use plan for Mumbai Port and TEFR for green field port at Pudimadaka for NTPC were under progress during this year.

HIGHWAYS UNIT

This unit provides comprehensive road transport consultancy as well as project management services covering all aspects of highways viz. expressways, national highways, state highways, rural roads etc. including bridges/viaducts and tunnels in relation to conceptual & detailed design, construction supervision, operation and maintenance, planning/management of networks, improvement/up-gradation, safety audits etc. The unit has been providing services since mid-eighties in Africa and Asia region.

During the year, the unit provided overseas consultancy services for supervision & up-gradation to paved road standard of existing roads in Terai Region of Nepal. The unit had provided domestic services for feasibility study and preparation of DPR for 400 km ADB funded road project in Tamil Nadu; DPR for 300 km NH sections in Nagaland; feasibility study for two major bridges in Manipur; independent engineer services for development of Chennai Outer Ring road in Tamil Nadu for TNRDC; project management services for NATRIP projects; safety audit for NH sections (939 Km) during construction stage; SOS for selected state highways in West Bengal; design and detailed estimate preparation for ROBs/flyovers at intersections at 6 locations for Delhi Development Authority; base-line Master Plan with SOS for development of state highways in West Bengal; collection and analysis of major/minor bridges condition and inventory data by MBIU on all national highways in Rajasthan and Andhra Pradesh; detailed third party inspection/quality assurance for construction of elevated road over Barapullah Nallah in New Delhi; PMC including FS/DPR of selected road stretches/corridors for up-gradation to 2/4 lane NH configuration under Bharat Mala Project in Gujarat and West Bengal; detailed engineering and PMC for bridges on approach road to RTPS in West Bengal; project preparation of Package III: Mogra-Kampa-Barojaguli in the Hooghly and Nadia district of West Bengal including the  state-of-art extra-dosed cable stayed bridge over river Ganga etc.

URBAN INFRASTRUCTURE DIVISON

This division has three strategic business units namely urban transport unit, urban engineering unit.

URBAN TRANSPORT UNIT

This unit provides comprehensive consultancy services in all aspects of urban transport including planning of integrated multi-modal public transit network; design, engineering and project management of infrastructure; O&M management of public transit systems; high, medium and light capacity mass rapid rail transit (RRT) and bus rapid transit (BRT) systems, etc. Regional transport studies are undertaken for optimal use of available infrastructure and phased augmentation of facilities for medium and long term. 

The unit has made major inroads into metro rail consultancy with the award of consultancy assignment of GC for Ahmedabad Metro, Phase-I in consortium with other international consultants. The unit has also been awarded some other major consultancy works like independent quality monitor for Noida Metro Rail Corporation Ltd.; DDC services for Apparel Park Depot on East- West corridor for MEGA Co. Ltd.; DDC services for power supply & 750 V d.c third rail traction for MEGA Co. Ltd.; PMC for priority at grade section of Nagpur Metro Rail Corporation Ltd., multimodal integration at six metro airports in India,  DPR for rail based mass transit system (RBMTS) in Meerut, Varanasi, DPR for RBMTS in Chennai for CMRL; study for listing & mapping of public transport infrastructure & routes of Kolkata for World Bank and DPR for Line III & IV and validation of DPR for Line II of Navi Mumbai Metro for CIDCO.

The unit has also been involved in GC for Bangalore Metro Phase-I, Delhi Metro Phase-III; interim consultancy for Bangalore Metro Phase -II and Nagpur Metro Phase-I; technical Feasibility Study (FS) & DPR for metro rail in Agra & Kanpur; DPR for MRTS/RRTS between Ahmedabad & Dholera; FS & DPR for Kochi Metro, Phase II; detailed design of power supply & distribution system, 750 V d.c third rail traction electrification and SCADA system for Bangalore Metro Phase-II; FS& DPR of rail based MRTS in Guwahati for GMDA; review of DPR for maintenance depots including scope of property development of Kengeri, Anjanapura, Kothanur and Hebbaggodi, depots of Bangalore Metro; consultancy services for preparation of DPR for Dahisar-Charkop-Bandra-Mankhurd metro corridor & Khadala-Ghatkopar-Thane-Kasarwadavali metro corridors in Mumbai; DDC for Gyaspur Depot on North-South metro corridor & apparel park depot on East- West metro corridor of  MEGA Co. Ltd.; DDC for six elevated metro stations for Ahmedabad metro rail project.

URBAN ENGINEERING UNIT

The Environmental Engineering unit has in its core staff highly qualified and experienced  personnel having specialization in the fields of environmental impact assessment, environmental management plan, social impact assessment, water supply/sanitation, ecology and socio-economics.

The unit is NABET accredited for EIA study of airport, ropeway, water resources, building construction, area development (township etc), transportation (highways, railways, metro, etc) and solid waste management.

This unit carried out more than 100 numbers of projects during 20 years since its inception in which the scope of services included assistance in applying for clearances from statutory authorities. The services offered by the unit includes the  environmental impact assessment and management plans; solid waste management; social impact assessment and resettlement action plans; environmental audit; environmental guidelines and policy formulation; design of sewerage, drainage & water supply systems.

Some of the projects completed during the year include EIA study for Bhaley dhunga ropeway in Sikkim; EIA study for Rajgir ropeway in Nalanda district of Bihar, EIA and SIA study (length 266.534 km (PPC01) TNRSP II) for  Tamil Nadu Road Sector Project, EIA and SIA study of DCBM and WGTK Metro Corridor located in Mumbai for MMRDA and EIA & SIA study for Kanpur and Agra Metro.

The projects under execution include EIA and SIA study for Dharamshala ropeway, New Tehri ropeway, Munsiari ropeway, Munnar ropeway, Varanasi Metro, Meerut Metro, Guwahati Metro, East-West Metro, Joka-Diamond Metro, Manipur Tunnel and environmental and social aspects of river morphology in Uttarakhand.

AHMEDABAD UNIT - This unit is operating since last three years and fulfills commercial responsibilities and business dealings in the state of Gujarat and neighboring states of Rajasthan, Madhya Pradesh and parts of Maharashtra.

The unit deals in sectors of railway sidings, Private Freight Terminals (PFT), building works and third party inspection of railway crossing works (ROBs/RUBs/Box pushing/Pipe pushing) and other engineering projects. The services provided by this unit include feasibility study, DPR, project management consultancy, design, etc. for various clients from central/ state government department, PSUs and private sector.

Major projects of this unit are MMLP at ICD Khodiyar, PFT Varnama, RTH Swaroopganj, and Rajasthan for CONCOR, modification & new construction of railway facilities for GSFC at Sikka, Gujarat, and feasibility study for rail facilities for HPCL at Manmad, Maharashtra and projects of third party inspection works in parts of Gujarat.

EXPOTECH DIVISION

The division offers integrated export packages for rolling stock including leasing, rehabilitation, maintenance and spare part support. It also renders technical consultancy services for workshop modernization, facility planning for rolling stock maintenance, training and technology transfer. During the year, the division handled the projects of supply of the state- of- the- art, stainless steel, LHB (Linke Hoffman Busch) design coaches to Bangladesh Railway; leasing and maintenance of locomotives in Mozambique; supply of MG ALCO locomotives to Senegal and warranty servicing and support activities in Bangladesh, Myanmar and Sri Lanka.

RITES had secured the contract for supply of 120 BG, stainless steel passenger coaches to Bangladesh Railway under the Indian line of credit during last financial year. These coaches are being manufactured in Rail Coach Factory. As a part delivery for this contract, two rakes consisting of 40 coaches have been exported in current year.

Towards successful completion of another milestone project of supply of twenty six BG diesel electric locomotives to Bangladesh Railway, warranty for ten locomotives was completed in July, 2015 and sixteen locomotives are under warranty at present. These locomotives are providing satisfactory performance on Bangladesh Railway network.

The locomotives leased by RITES to CFM/ Mozambique continued to operate throughout the year. The contract was further extended for two years till August, 2017. The fleet of sixteen locomotives including one locomotive of 3000 HP, one locomotive of 2300 HP and fourteen locomotives of 1350 HP are operating on lease arrangements at two different locations - Maputo and Beira, Mozambique. These locomotives have been providing excellent service to the clients for the last nine years. The companys service teams located at these two locations are providing complete maintenance support to ensure maximum availability and reliability of locomotives as per the clients requirement.

In a significant breakthrough, RITES secured a major contract from Myanmar for supply of 18 Meter Gauge 1350 HP Diesel Electric Locomotives with several modern features. The project is being funded under a Line of Credit extended by the Government of India.

QUALITY ASSURANCE DIVISION

The division renders third party inspection and vendor assessment in India and abroad to various clients in the government, public and private sectors. In India, the laboratory testing services are also provided by the division. This division has regional offices at Delhi, Chennai, Kolkata, Mumbai & Bhilai and 39 sub-regional offices spread over prominent locations across India.

The division does substantial portion of third party inspection for Indian Railways (IR). During the year, the division enhanced its business with the power utilities and infrastructure projects in different states. In addition to existing prestigious non-railway sector clients, many new organizations and clients like Kochi Metro Rail Corporation, Lucknow Metro Rail Corporation, Rourkela Steel Plant, BHEL Trichy, and various SEBs awarded contracts for third party inspection & related services.

RITES has been awarded ISO/IEC 17020:2012 accreditation for various NABCB Scope Sectors including the fabricated metal products & other transport equipments (rolling stock- wagons, coaches, wheels & axles). One more Scope Sector namely pulp, paper & paper products has been added in the scope of accreditation during the year thus covering most of the sectors in recognition to standard of service to clients.

Apart from laboratory at eastern region having NABL accreditation to ISO/IEC 17025:2005 for last many years, lab at western region, Mumbai has been upgraded and accredited to ISO/IEC 17025:2005 during the year.

The division is providing third party inspection services at conversion and wet leasing agents against Steel Authority of India Ltd. for inspection of long products, including  slabs and coils.

In addition, the division has been performing inspection of machinery & plant, crank shaft, wheels, axles, wheel sets, pistons, piston rings, at various locations abroad like USA, China, Germany, Sweden, Italy, Russia, Ukraine etc. on behalf of IR, Container Corporation of India and a number of wagon manufactures. The division has also been awarded work of inspection of Head Hardened Rail & fittings in Russia and European countries by Delhi Metro Rail Corporation.

The division has been rendering consultancy services for QMS (ISO 9001), FSMS (ISO 22000), OHSAS 18001, service quality management system (IS 15700) for various prestigious PSUs/ state government organizations. The division has also provided consultancy services to M/s Central Ware Housing Corporation (CWC), Delhi for customer satisfaction survey for Attari warehouse and study on alternative use of low utilization capacity of CWC warehouses.

RITES through it eminent experts represents in various Standard Formulation Committees of Bureau of Indian Standards as well as Board Membership of Quality Council of India (QCI)/ NABCB to enhance its contribution in quality improvement at the national level.

INDUSTRIAL ENGINEERING DIVISION

This division has three strategic business units namely rolling stock design unit, material system management unit and ropeway & industrial engineering unit.

ROLLING STOCK DESIGN UNIT

Rolling Stock Design (RSD) unit formerly named as Mechanical Design Division (MDD) specializes in design and development of railway rolling stocks using the state-of-the-art hardware and advanced software techniques like solid modeling, finite element modeling & analysis and simulation techniques such as crash and vehicle dynamics simulation. It also markets rolling stock designs and offers technical support to rolling stock manufacturers. However, taking advantage of its inherent expertise, it has diversified to offer expert technical services in setting  of the state- of- art R&D facilities, test centers and modern coaching/freight car depots on turnkey basis.

Some of the major achievements of this unit include design of crashworthy coaches for the Indian Railways (IR); highly successful container flat wagon with speed potential of 100 kmph freight operation; clinker wagon; BFAT wagon for the MoD; Food grain wagon and frameless tank wagon for petroleum products.

Major projects in hand include design and development of special van for carrying milk at higher speed and high speed broad gauge Self Propelled Accident Relief Train (SPART) for IR.

This unit is also working on development of crashworthy locomotive design and occupant protection for IR, development of emission norms for diesel locomotives and up-gradation of diesel engine technology.

MATERIALS SYSTEM MANAGEMENT UNIT

This unit has been providing comprehensive procurement & logistics management consultancy services in compliance with the guidelines & procedures of the International Funding Organizations (IFOs) and the National Governments.  The core competency of the unit is to offer specialized services such as in-depth knowledge of procurement policies & procedures of the Government of India, bilateral/multilateral funding agencies, Railways & DGS&D, expertise in various fields of materials management Major procurement consultancy contracts include EPW and NACO under the Ministry of Health and Family Welfare, the Government of India.

During the current year, the unit has signed a new contract with National AIDS Control Organization (NACO), MOH&FW and EPW consultancy contract has been extended by another year.

Procurements have been processed by the unit for Revised National Tuberculosis Control Project (RNTCP), National Vector Borne Disease Control Project (NVBDCP) secured from MOH&FW, NACO etc. During the current year, procurement consultancy for a value of around Rs. 780 crore had been provided under these projects of MOH&FW.

The contract management of on-going assignments have been undertaken, which include inspection & testing of drugs/equipments, monitoring of supplies, co-ordination with consignees spread all over the country, processing of suppliers bills for payment & handling legal issues and reconciliation of funds with MOH&FW.

ROPEWAY & INDUSTRIAL ENGINEERING UNIT

The ropeway unit provides consultancy services for the aerial ropeways for passenger/material transportation and for funicular railway projects. This unit is presently undertaking project management consultancy for setting up of passenger ropeways at Namchi, Sikkim and Jammu besides passenger and material ropeways for Shri Mata Vaishno Devi Shrine. The unit has also provided project management consultancy services for funicular railway systems at Nashik and Thane in Maharastra, which are nearing completion. The unit has completed feasibility study for passenger ropeway at Mundeshwari, Gaya, Bihar. RITES has been nominated as the project management consultant by the Govt. of Bihar for its various ropeway projects.

The Industrial Engineering unit provides a range of services including feasibility studies, techno-commercial evaluation, detailed project report, and project management consultancy for setting up of Industrial units in railway and non-railway sectors. The unit also undertakes setting up of Industrial units on turnkey basis. Besides, the unit provides a range of advisory services such as setting up of projects on a PPP/JV mode and work measurement/productivity improvement studies for manufacturing units. The unit has secured a turnkey project for construction of Traction Alternator Factory (TAF)  for manufacturing 100 traction alternators and overhauling of 600 traction motors for Indian Railways at Vidisha (M.P.). The factory is being set up in line with the Make in India initiative of the GoI to manufacture traction alternators for high horsepower diesel locomotives in-house, which are presently being imported.

The unit has successfully completed transactional advisory services for the setting up of diesel locomotive factory at Marhowra, Bihar. It has also completed the construction of FIAT Bogie manufacturing unit at Budge Budge, W.B. The project for renovation of National Rail Museum, New Delhi was undertaken and completed during the year. This unit has also commissioned the M-15 gas turbine aggregate test facilities at INS Eksila, Visakhapatnam for the Indian Navy.

RAILWAY EQUIPMENT SERVICES DIVISION

This division is a leading service provider for complete one stop solution in respect of operations and maintenance of railway sidings for non-railway customers in power, steel, mining, cement, & port sector. The division has secured new and repeat work orders from a number of clients in the recent past, some of the prominent being NTPC, L&T, Visakhapattnam Port Trust, Dhamra Port, Paradip Port Trust, Tata Steel, DVC, etc. for loco leasing, operation of their railway systems, maintenance of rolling stock & track etc.

The business of wet leasing of shunting locomotives including operation and maintenance has been well received by domestic non-railway customers. So far 33 locomotives have been leased out in the span of last 5 years: one locomotive each to WBPDCL/Bandel, NSPCL/Bhilai, Uttam Galva/Wardha, KTPS/Kolaghat, CLP/Jhajjar, DVC/Andal, APML/Tiroda, DVC/Koderma, KBUNL/Kanti, VIPL/Butibori, two locomotives each to Kolkata Port Trust/Kolkata, Paradip Port Trust/Paradip, Tata Steel, three locomotives to RSP/Rourkela, four locomotives to Visakhapattnam Port Trust and five locomotives to Dhamra Port. Further, demand of shunting locomotives on lease by non-railway customers is growing day by day.

Apart from wet leasing, the division is also engaged in maintenance of over 120 diesel locomotives & 1200 wagons owned by customers like NTPC, NSPCL, WBPDCL, SAIL & APCPL, besides, operations and maintenance of track of some of the clients.

PRIVATISATION AND CONCESSIONS UNIT

This unit provide transaction advisory services for various public private partnership projects in infrastructure sector, project appraisal for the investment project, legal advisory for institutional framework and procurement contracts.

In railway sector, unit provided financial advisory services for development of Bhuj Naliya Vayor rail connectivity project. Unit also provided legal consultancy services for setting up an electric locomotive manufacturing unit at Madhepura (Bihar) and procurement of EMU train sets for IR.      

During the year, it secured assignment of transaction advisory services for developing 3rd line with electrification on PPP mode at Kazipet-Vijayawada and Nagpur-Wardha sections of IR.

It continued to provide consultancy services to various clients/ in house for infrastructure sectors such as ports, urban infra, urban transport, etc.

INFORMATION TECHNOLOGY UNIT

This unit offers consultancy services to railways, non-railway, government and public sector organizations in the field of web based technologies, feasibility study, system analysis, system design, software development, implementation support, identification of hardware & system software requirements, user training and software conversion/porting of computerized commercial applications particularly in the areas of company accounting, sales tax/ value added tax, payroll, materials management, workshop management, etc.  The major on-going projects include centralized apportionment of the Indian Railways earnings for goods and passenger from various zones of the Indian Railways; development of budget module for preparation of fund management system, Govt. of Tripura; conversion of FMIS system from fox-pro to Oracle for DLW Varanasi, etc. The unit also provides annual maintenance support for various application software developed for clients like the Ministry of Railways, IRCON, DLW Varanasi, etc.

The unit is actively involved in implementation of SAP and ERP in the organization to support its business operations, enhance its core capabilities to gain competitive advantage in market. The unit has its own state-of-the-art data centre equipped with high end blade servers, network equipments, modern surveillance system, fire detection, fire suppression etc.  It has successfully implemented E-procurement system in RITES. The Information Security Management system (ISMS) 270001 has also been documented and implemented.

In order to secure the data, the unit is establishing a disaster recovery facility for its state- of- the - art SAP data center. The unit also supports the in-house needs of RITES by providing services for hardware procurement, access to internet and corporate e-mail services, etc. The unit is empanelled with national e-governance unit to undertake integration of different applications with e-governance system (under digital India).

HRD AND TRAINING UNIT

Being a consultancy organization of international repute, RITES believes in developing its human capital and provide them with world class skills. To ensure this, RITES has taken a number of training initiatives, both in-house and external.

In-house training programs were organized, aiming at improving the functional and technical skills across all levels of employees. Professional programs, workshops and seminars conducted by reputed and prestigious agencies were carefully identified in line with business needs of RITES and suitable officers were nominated for such programs. Besides, RITES also organized customized training exclusively for its officials through experts and knowledge partners. Also, behavioral and personality development training programs were conducted focusing on developing attitudinal and soft skills. Employees were also sensitized on labor law compliances through appropriate programs/workshops to comply with statutory obligations in labour deployment. Employees were also trained on various softwares such as Bentleys Power Rail Track, Auto CAD etc.

Newly recruited Graduate Engineers Trainees (GETs) were given structured induction training for seamless assimilation into the organization and understanding of organizational culture. RITES also achieved the training target set as per MoU for the year.

There has been a special focus on leadership development at RITES. Senior business leaders were nominated for programs on leadership in India and abroad. A special workshop is being developed for middle management, with a leading B-school in the region, to help them understand and inculcate the traits of successful leaders. In addition, prepromotional trainings were organized across all RITES offices for employees belonging to SC/ST category to help them perform better in the promotion exercise. RITES also introduced E-PMS this year and extensive trainings were organized in each office to help employees embrace the process with ease.

FINANCIAL HIGHLIGHTS                                                                                                             The financial performance of the Company for the year 2015-16 is given below:                                                                                                                                                     (Rs.in Crore) Particulars 2015-16 2014-15 Financial  Results:     Total Income 1294 1166 Operating Turnover 1087 1015 Operating Expenditure 779 710 Other Income 207 151 Profit Before Tax (PBT) 515 456 Income /deferred tax (176) (150) Profit After Tax (PAT) 339 306 Appropriations:     Dividend including interim dividend 136 62 Dividend Tax 28 12 Transfer to General Reserve 175 232   BUSINESS PERFORMANCE   During the year, company has achieved highest ever turnover of Rs 1294 crore as compared to previous year’s turnover of Rs 1166 crore, higher by 11%. The profit before tax is Rs 515 crore being higher by 13% as against Rs 456 crore of the previous year. During the year, company was engaged in a number of prestigious domestic projects, which includes works for setting up a  FIAT  bogie frame manufacturing plant at Budge- Budge for  RCF- Kapurthala and a wagon manufacturing factory at Kulti, Modern Bus Terminal at Maltipatpur, Puri for the Orissa Government,  setting  up of M-15 Gas Turbine aggregate testing facilities for Indian Navy at INS Eksila, Visakhapatnam, Preliminary Engineering & Traffic Survey (PETS) of Future Corridors  for  DFCCIL, Independent Engineer Services for Development of Chennai Outer Ring Road in Tamilnadu for TNRDC, Project Advisory Services including Detailed Design & Report Preparation for Development of Six Lane Extra dosed Green Field Bridge project over River Ganga at Patna for Bihar State Road Development Corporation Ltd (BSRDCL), DPR for Construction of ROBs/Flyover at 6 locations for DDA, Consultancy for Bangalore Metro Phase-I and Delhi Metro Phase-III, Interim consultancy for Bangalore Metro Phase-II and Nagpur Metro Phase-I, Technical feasibility study & DPR for Metro Rail in Agra & Kanpur, DPR for MRTS/RRTS between Ahmedabad & Dholera, Feasibility study & DPR for Kochi Metro Phase II, Maintenance of Rolling Stock & workshop equipment of MGR system at various locations of NTPC like Rihand, Singrauli, Sipat, Talcher, Kahalgaon & Farakka, Project Management Consultancy services for (i) Central university at Pondicherry, Karnataka, Kerala, Gaya, Allahabad,  IIT at Kharagpur, NIT at Meghalaya (ii) National Automotive Testing and R&D Infrastructure Project (NATRIP) - Ministry of Heavy Industries (iii) Rail Infrastructure for DVC, NTPC, CIL and others at different locations and (iv) Construction of Integrated  check posts at Raxaul and Jogbani along Indo-Nepal border, at Agartala, Dawaki and Petrapole along Indo-Bangladesh border, Moreh along Indo - Myanmar border, engineering consultancy for expansion of Shimla airport, Pantnagar Airport, Greenfield Airports at Singrauli & Gwalior. ICPs at Petrapole commissioned and at Raxaul also nearly completed. During the year, RITES has taken up an important project at Vidisha on turnkey basis for manufacturing of traction alternators, which will be an import substitution product for the Indian Railways. During the year, company was engaged in a number of prestigious international assignments in export, leasing and consultancy services which included contract for supply of 120 BG passenger coaches to Bangladesh Railway, leasing of locomotives to CFM, Mozambique for two different locations at Maputo and Beira and supply of  six MG diesel electric locomotives to Senegal.  RITES exported 40 BG passenger coaches to Bangladesh Railways during the Year 2015-16 and balance 80 coaches are planned for export during the year 2016-17.The fleet of 16 locomotives leased by RITES to CFM, Mozambique continued to operate throughout the year. Four MG diesel locomotives were also exported to Senegal during the year. RITES has also provided warranty maintenance and support services in Bangladesh, Myanmar and Sri Lanka during the year 2015-16, Consultancy services for supervision for up-gradation to paved road Standard of existing roads in Terai region of Nepal, services for development of 50 year National Transport Master Plan for Kenya and feasibility study for Mayumba-Mbigou New standard Gauge Railway line in Gabon.   During the year, the company has secured major export orders from Myanma Railway for supply of eighteen MG diesel electric locomotives and from Senegal for supply of six MG diesel electric locomotives.   OUTLOOK Over the years, RITES, as one of the leading transport infrastructure Consulting Companies in Public Sector in the Country, has been playing a pivotal role in the development of transport and infrastructure sectors viz, Railways, Highways, Ports, Airports, Waterways, Ropeways, Urban Transport, Urban Engineering, Container Depots, Institutional Buildings, and Railway Electrification etc. RITES has eventually diversified into providing multidisciplinary services from concept to commissioning for efficient and economic implementation of the projects. The Company continued to provide specialized, integrated services under single roof in transportation infrastructure sector and export packages for supply of locomotives, coaches, wagons, spare parts and modernization of workshops. The Company is expanding its reach by venturing into the business of wagon manufacturing and is also planning to develop potential business avenues in power sector including Green Energy etc. The company is also exploring business opportunities in captive railway systems in India through equity participation with other stakeholders, with the main focus on providing total transportation solution as against pure consultancy assignments. Business of offering shunting locomotives on wet lease including operation & maintenance continued to be well received by domestic Non- Railway clients. 33 locos have so far been put to service in India. As a matter of diversification (i) RITES and the Indian Railways promoted a Joint Venture Company, Railway Energy Management Company Ltd. (REMCL) for renewable energy projects, bilateral purchases, power trading and energy efficiency projects etc. In a record time of 10 months, it has commissioned 26 MW Wind Mill in Jaisalmer and also concluded power procurement contracts for 1200 MW in different states (ii) RITES has completed setting up of the state-of-the-Art wagon factory, at Kulti, West Bengal as a 50:50 JVC between RITES and SAIL, a “Make in India” initiative of the Indian Railways. An assured Off-take Agreement has also been signed with Railways, arising out of the commitment made by the Ministry of Railways in the year 2010 regarding assured off-take order for manufacture of 1200 wagons/annum and rehabilitation of a minimum of 300 wagons/annum. (iii) Company has taken over turnkey works for construction and supply, installation and commissioning of Machinery & Plant for upgradation / modernization of Railway Workshops.    

CONSERVATION OF ENERGY As a consultancy organization, RITES is not a major energy consumer and hence our carbon emissions are minimum.  Yet, for the consultancy studies undertaken by RITES, it has been the practice to pursue the national goal of energy conservation and accordingly, suggestions are given to our client’s for measures and methods to conserve energy.   I.          The steps taken or impact on conservation of energy;   In Gurgaon, RITES is housed in two large buildings (ROC-I&II) where energy saving measures have been implemented and energy audits conducted regularly. RITES has been awarded Gold LEED certification by Indian Green Building Council for one of its offices.  Real time air conditioning temperature is monitored and corrections are done to suit comfort of occupants. VFD’s and VRF system have been installed for precise temperature control which in turn help to conserve energy. The neon signs installed in the premises are LED operated. All new lighting installations are filled with T5 or CF lamps. II.         The Steps taken by the company for utilizing alternate source of energy;   For both the buildings, solar power panels have been mounted on roof tops to generate electricity from solar power.    III.     The Capital investment on energy conservation equipments;   Rs. 9.0 lakh have been incurred towards installation of T5 light fittings in the new canteen for employees.   

TECHNOLOGY ABSORPTION I           The efforts made towards technology absorption: Being a leading consultancy organization in the field of transportation, RITES keep itself abreast with the latest technology and knowhow in not only in the area of the transportation but also the technology and technological innovation that bring better efficiency and economic benefits to the sector. To achieve this, the company continuously strives to procure and absorb the best and the latest technological innovations in all the areas of its business by continuously updating its software and knowledge base by sponsoring and encouraging its experts to actively participate in national and international seminars and conferences, perusal of information and technological updates available on internet, study of periodicals. II          The benefits derived like product improvement, cost reduction, product development or import substitution: Optimized and environment friendly rolling stock designs being developed by the company will benefit the sector in many ways such as weight reduction, reduced manufacturing cost, reduced track load density and track wear, increased speed, higher carrying capacity and lowered emission. This will also lead to reduced fuel consumption. This has helped the industry in developing rolling stock components by developing and standardizing their specification which were being imported so far III         In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) a.    The details of technology imported; ·         Not applicable b.    The year of import Not applicable. c.    Whether the technology been fully absorbed ·         Not applicable. d.    If not fully absorbed, areas where absorption has not been taken place, and the reasons thereof: and ·         Not applicable.    

FOREIGN EXCHANGE EARNINGS AND OUTGO The Foreign Exchange earned and the Foreign Exchange outgo in terms of actual inflows/ outflows during the year is as under: Total foreign exchange earnings during the year under review were Rs.233.45 crore (previous year Rs.188.69 crore) and foreign exchange outgo were Rs.13.43 crore (previous year Rs.13.48 crore) respectively. This resulted in net foreign exchange earnings of Rs 220.02 crore (previous year Rs 175.21 crore).     

DIRECTORS’ RESPONSIBILITY STATEMENT under the companies act, 2013 In pursuance of Section 134 (5) of the Companies Act, 2013, The Director hereby confirms that: (a)     In the preparation of the annual accounts the applicable accounting standards have been followed and there is no material departure from the same. (b)     the directors have selected such accounting policies and applied them consistently and made judgments and estimates that 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)     The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d)     The directors have prepared the annual accounts on a going concern basis; and (e)     The directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively and (f)      The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.