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14th Annual Report 2017-18INDUSTRY SCENARIO & THE PPP MODELIndian Railways are operating in the core sector of theeconomy. To strengthen, modernise and expand therailway network, the investment requirement is huge.Private sector participation would be required foraccelerated construction of fixed rail infrastructure. Inthe recent past, the Ministry of Railways had initiatedseveral concrete measures to explore the PPP route forimproving its infrastructure across the country. RailwayMinistry has an ambitious plan for capacity augmentation,up gradation and modernisation of Indian Railways. Theport connectivity is an important aspect of vision. In thelast few years Development in Railway and PortInfrastructure etc has been given a tremendous boost.Indian Railways has formed a number of Public PrivateParticipation (PPP) Companies for enhancing portconnectivity to accelerate growth of freight traffic throughrail to ports. The Indian Railways is now reversingsustained loss in market share at the hand of roadtransport. The results are encouraging and it is win –win situation for Indian Railway & your Company. Alsocompetition with the Road is driving the Railways toimprove its infrastructure. The future of your Companyis encouraging with the growth of the Rail Infrastructurein the long run and it will substantionally increase thecompetitiveness vis-à-vis the road transport sector.OPERATIONS OF THE COMPANY16236 goods train (12700 loaded & 3536 empty) hadrun on the section carrying total cargo of 28.61 MTearned a revenue of 61330.52 Lakhs.TRANSFER TO RESERVEYour Directors have proposed not to transfer any sumto the general reserve.DOUBLING BETWEEN SAMAKHYALI- PALANPURThe Palanpur–Samakhiali is an existing single BG linesection on Palanpur– Gandhidham BG route. Samakhialiis a BG Junction Station on Gandhidham-SamakhialiViramgam BG section and Gandhidham–Samakhiali–Palanpur BG section. There is already double BG lineexisting between stretch Gandhidham–Samakhiali.Gandhidham–Palanpur is a feeder route of WesternRailway to Dedicated Freight Corridor Mumbai–Delhi.The section between Palanpur–Samakhiali is verysaturated and carries heavy freight and passengertraffic. Palanpur, Bhildi and Samakhiali are three junctionstations lying on this BG Main route. Palanpur is atKm 0.00, Bhildi at Km 45.50 and Samakhiali Jn at Km247.73 Ex-Palanpur.The project of the Company for the Doubling ofPalanpur-Samakhiali (247.73 kms) is being executed byRail Vikas Nigam Limited at a total project cost of 1548.66 Crs. Rail Vikas Nigam Limited is executingthe project work in six Packages. The status of theprogress of work as on the year ended 31.03.2018 is asunder:-The Income from operations of your Company hasincreased from 83858.54 lakhs in the Financial Year2016-17 to 102546.22 lakhs in the Financial Year2017-18. The break-up of the Income from operations isas follow: in Lakhs)( PackageNo.Stretch coveredagainst the packagePackage-1SIOB (Incl)-KYG (Incl)–34.66 kmParticularsPackage-2BLDI (Incl)-DEOR (Incl) – 29.48 kmPackage-3KYG (Excl)-CASA (Incl) – 67.90 kmPackage-4DEOR (Excl)-CASA (Excl) – 72.01 kmPackage-5PNU (Incl)-BLDIPackage-6Construction of Important BridgeNo 41(15x24.40 composite weldedgirder and Major bridge no 63D & 76B(1x 76.2 Open web through type girder)2016-172017-18Income from Bulk Traffic& operating revenue61330.5269452.11Construction 46.22The Net Profit after tax has increased from 15077.85Lakhs in 2016-17 to 22210.70 Lakhs in 2017-18.During the year 2017-18, a total of 17939 goods train(14209 loaded & 3730 empty) had run on the sectioncarrying total cargo of 32.83 MT earned revenue of 69452.11 lakhs as compared to 2016-17, a total no(Excl) – 43.68 km(Contract in all the six packages has been awarded and the worksare in progress)7

K utch Railway CompanCompanyy LimitedCIN: U45202DL2004PLC124267The year wise expenditure incurred by the Company onthe project is as follow:( in Crs.)Financial AINTENANCE WORKS OF THE EXISTING SECTIONDuring the year under review your company hadincurred the following major expenses/commitments forthe maintenance of the existing line between Palanpurand Gandhidham:1.Weld renewal of 10570 Welds at the cost of 13.37 Cr.2.Laying of Optical Fibre Cables on PalanpurSamakhiyali section at the cost of the 12.44 Cr.3.Causal renewal of scabby and kinky rails on KutchRailway project line at the cost of 28 Cr.4.Replacement of under capacity Data Logger onPalanpur-Samakhiyali section.5.Deep Screening of project line from Palanpur toGandhidham at the cost of 55 Cr. to the carriedout in three years.ELECTRIFICATION OF THE SECTIONYour Directors are of the opinion that that electrificationof the KRC section is important in view of all roundelectrification being undertaken in Indian Railway andalso due to commissioning of Western DFC. Yourdirectors consider that after the completion of theElectrification in the adjoining areas of the Company’ssection it will not be possible for the Railways to providediesel engines for the KRC section. In order to retaintraffic on the section post electrification of the adjoiningarea your Company had decided to electrify the doubleline between Palanpur (Excluding) to Samakhiali (247KM) and UP line between Samakhailai and Gandhidham(53 KM) at a total project cost of 511.0 crores(Approx). Your company has appointed Rail VikasNigam Limited as the executing agency for executingthe project of electrification of double line betweenPalanpur – Samakhiyali. (247KM) and for theelectrification of single line between Samakhailai Gandhidham (53 KM), Ministry of Railway (MoR) iscommunicated to carry out the work at the cost of KRCfrom an agency nominated by MoR.8FUTURE OUTLOOKIndia continues to be one of the fastest growingeconomies in the world and this is expected to continuein financial year 2018-19, as per the latest economicsurvey, with GST having been successfully implemented,trade conditions have stabilised and we are witnessinga gradual improvement in demand for all commodities.Your Company foresees sustained growth of traffic onGandhidham–Palanpur section. As per estimates,Gandhidham area accounts for the 40% of the WesternRailway’s Loading. Kandla & Mundra Ports have veryambitious development plans and they have projectedsubstantial increase in the future traffic. & Mundra Portsare connected to Gandhidham station with double lines.Bhuj-Nallia Meter Gauge line has also been sanctionedby Ministry of Railway for conversion from Meter Gaugeto Broad Gauge along with extension from Nallia toVayor to provide rail connectivity to Cement factoriescoming up in that area. All these developments haveraised optimism for Kutch Railway Company aboutincrease in traffic on Gandhidham-Palanpur line.SHARE CAPITALThere was no change in the Company’s share capitalduring the year under review. The Company’s paid upshare capital remained at 250,00,00,000 comprisingof 25,00,00,000 equity shares of 10/- each.BOARD MEETINGSSix (6) Board meetings were held during the financialyear ended 31st March, 2018. The dates of themeetings are as follow: 19th July 2017, 18th August2017, 22nd November 2017, 21st December 2017, 30thJanuary 2018 and 26th February 2018.DIRECTORS AND KEY MANAGERIAL PERSONNELIn accordance with the provisions of the CompaniesAct, 2013 and the Articles of Association of theCompany Shri Pramod Kumar Singh, Dharmendra NathSondhi and Capt. Unmesh Abhyankar Directors of theCompany shall retire by rotation at the ensuing AnnualGeneral Meeting. Shri Pramod Kumar Singh,Dharmendra Nath Sondhi and Capt. Unmesh Abhyankar,being eligible, have offered themselves forreappointment.Pursuant to the provisions of section 203 of theCompanies Act, 2013 Act, the key managerial personnelof the Company are - Shri Aditya Prakash Mishra,Managing Director, Shri Ankur Rastogi, Chief FinancialOfficer and Shri Sanjeev Sharma, Company Secretary.Shri Aditya Prakash Mishra, Managing Director retired

14th Annual Report 2017-18on 31.01.2018. There has been no change in the otherkey managerial personnel during the year.During the year, the non-executive directors of theCompany had no pecuniary relationship or transactionswith the Company, other than the expenses incurred bythem for the purpose of attending meetings of theCompany.During the year Shri Ambrish Kumar Gupta, Chairmanand Shri Adtya Prakash Mishra, Managing Director hasvacated their office due to their retirement.Shri Arun Kumar, Director has vacated the office ofDirector of the Company due to his elevation asDirector (Operations), Rail Vikas Nigam Limited and Dr.Monica Agnihotri due to her repatriation to RailwayBoard, Ministry of Railways.Shri Devi Prasad Pande, Shri Raj Kumar Sarkar,Independent Directors of the Company had due to theirpersonal reasons, vacated the office of the directorshipof the Company.Your Board places on record its deep appreciation forthe valuable services and contributions made by themduring their tenure as Director of the Company.INDEPENDENT DIRECTORSDuring the year, Shri Devi Prasad Pande and Shri RajKumar Sarkar, the Independent Directors vide theirletter dated 10/08/2017 had due to their personalreasons had vacated the office of the IndependentDirectorship of the Company. The management is of theview that the Company is a Joint Venture therefore, interms of the provisions of Section 149(4) & 149(5) ofthe Companies Act, 2013 read with rule 4 of theCompanies (Appointment and Qualification of Directors)Rules, 2014, is not required to appoint IndependentDirectors.AUDIT COMMITTEEThe Company has Audit Committee comprising thefollowing are its members as on 01.04.2017:the Company. The Board of Directors of the companyconsiders that in view of the notification dated 13th July,2017, amendment in Companies (Meeting of the Boardand its Powers) Rules 2014 by Ministry of CorporateAffairs the Company is not required to constitute anAudit Committee of the Directors. Therefore, Board ofDirectors of the Company in its meeting held on 18thAugust 2017 disbanded the Audit Committee.NOMINATION AND REMUNERATION COMMITTEEThe nominations and Remuneration Committee of theBoard was disbanded by the Board in its meeting heldon 18th August 2017.The Board of the companyconsiders that in view of the notification dated 13th July,2017, amendment in Companies (Meeting of the Boardand its Powers) Rules 2014 by Ministry of CorporateAffairs the Company is not required to constitute aNomination and remuneration committee.DIRECTOR’S RESPONSIBILITY STATEMENTThe Board of Directors of the Company in pursuance ofSection 134 (5) of the Companies Act, 2013 asamended hereby confirms that:i)That in the preparation of the annual accounts, allthe applicable accounting standards have beenfollowed and there has been no material departure.ii)That such accounting policies were selected andapplied consistently and such judgments andestimates were made that are reasonable andprudent so as to give a true and fair view of thestate of affairs of the Company for the period endedon 31st March 2018.iii) That proper and sufficient care has been taken forthe maintenance of adequate accounting records inaccordance with the provisions of the CompaniesAct, 2013, for safeguarding the assets of theCompany and for preventing and detecting fraudand other irregularities.iv) That the Annual Accounts have been prepared on agoing concern basis.1. Shri Devi Prasad Pande, Independent Director2. Shri Raj Kumar Sarkar, Independent Director3. Dr. Meenu Dang, Non Executive DirectorThe Managing Director, Chief Financial Officer andAuditors are permanent invitees to the committeemeetings. The Company Secretary is the Secretary ofthe meetings. Shri Devi Prasad Pande and Shri RajKumar Sarkar, Independent Directors vide their letterdated 10/08/2017 had due to their personal reasonsvacated the office of the Independent Directorship ofSUBSIDIARIES, JOINT VENTURES AND ASSOCIATECOMPANIESThe company has no subsidiaries or associateCompanies. The Company also does not have any jointventures.EXTRACTS OF ANNUAL RETURNPursuant to sub-section 3(a) of section 134 and subsection 3 of Section 92 of the Companies Act’ 2013read with Rule 12 of the Companies (Management and9

K utch Railway CompanCompanyy LimitedCIN: U45202DL2004PLC124267administration) Rules, 2014 the extracts of the AnnualReturn in Form No. MGT-9 as at March 31, 2018 formspart of this report as Annexure-AAUDITORSM/s AKG and Associates, Chartered Accountants wereappointed by the C&AG as Statutory Auditors of theCompany for the year 2017-18.AUDITORS OBSERVATIONSThe remarks on the observations of the StatutoryAuditors for the period under review are placed atAnnexure B and appropriate disclosures in regardthereof are contained in the accounting polices andnotes on accounts forming integral part of the Accounts.SECRETARIAL AUDITOR AND SECRETARIAL AUDITREPORTsafeguarded and protected against losses that mayarise from unauthorized / incorrect use.Further, it strives to ensure that all transactions areevaluated, authorised, recorded and reported accurately.The internal control system is designed to adequatelyensure that financial and other records maintained areaccurate and are reliable for preparing financialinformation and other data. The internal controlprocedures are augmented by an internal and externalaudit and periodic review by the management.PARTICULARS OF LOANS GIVEN, INVESTMENTMADE, GUARANTEE GIVEN AND SECURITIESPROVIDEDDuring the year under review, the company has notgiven any loan or has made investment or has givenguarantees under section 186 of the companies Act,2013.Pursuant to section 204 of the Companies Act, 2013,read with the Companies the Companies (Appointmentand Remuneration of Managerial Personnel) Rules,2014, your company had appointed M/s Vinod Kumar &Co., Practicing Company Secretaries, Delhi as itsSecretarial Auditor to conduct the Secretarial Audit ofthe Company for the Financial Year 2017-18. TheCompany provided all assistance and facilities to theSecretarial Auditor for conducting their audit. TheReport of Secretarial Auditor for the Financial Year2017-18 is annexed to this report as Annexure – C andreplies of the management to their observations atAnnexure – D.The Company will continue to uphold the true sprit ofCorporate Governance and implement the bestgovernance practices. It lays emphasis on transparency,accountability and professional management.FIXED DEPOSITSCORPORATE SOCIAL RESPONSIBILITYThe Company has not accepted any fixed deposits fromthe public. Therefore, it is not required to furnishinformation in respect of outstanding deposits underNon-banking, Non-Financial Companies (Reserve Bank)Directions, 1966 and Companies (Accounts) Rules,2014.The Company is committed to conduct its business in asocially responsible, ethical and environmental friendlymanner and to continuously work towards improvingquality of life of the communities. The company has aduly constituted CSR Committee, which is responsiblefor fulfilling the CSR Objectives of the company. As onMarch 2018, the Committee comprised viz. Shri SurinderKumar Dhiman, Shri Sajal Mittra, Shri Pramod KumarSingh, Divisional Railway Manager (Ahmedabad) andShri D. N. Sondhi. Shri Surinder Kumar Dhiman is theChairman of the CSR Committee.DETAILS OF SIGNFICANTAND MATERIAL ORDERSPASSED IMPACTING THE COMPANY’S OPERATIONSThere are no significant material orders passed by theregulator/ courts which would impact the going concernstatus of the Company and its future operations.INTERNAL FINANCIAL CONTROL SYSTEMSThe Company has an established system of internalFinancial Control to ensure that all assets are10RISK MANAGEMENTYour Board is of the opinion that, there are no elementsof risk which may threaten the existence of theCompany hence it was not required to implement a riskmanagement.CORPORATE GOVERNANCECSR POLICYThe Company has in place CSR Policy with lays downthe philosophy and approach towards CSR commitment.The CSR Policy of the Company may be accessed onthe company’s website www.kutchrail.org

14th Annual Report 2017-18The annual report on CSR containing particularsspecified in Companies (CSR Policy ) Rules 2014including an update on the CSR initiatives taken by theCompany during the year in given in Annexure E andforms integral part of this Report.REPORTING UNDER THE SECTION 21 OF THESEXUAL HARASSEMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION ANDREDRESSAL) ACT, 2013The following is a summary of sexual harassmentcomplaints received and disposed off during the calendaryear.Number of Complaints received: NILNumber of Complaints disposed off : NILClosing balance of the complaints: NILMATERIAL CHANGES AFFECTING THE FINANCIALPOSITION OF THE COMPANYNo material change and commitment affecting thefinancial position of the Company have occurred betweenthe financial year ended on 31st March 2018 and thedate of the report.CONTINGENT LIABILITY OF SERVICE TAXA show cause notice issued to the Company by DirectorGeneral of Central Excise Intelligence (DGCEI), raisinga demand of 213.59 Crores relating to financial years2009-10 to 2013-14. The reply to the show cause noticewas given on 06.01.2015 and personal hearing beforePrincipal Commissioner was held on 21.09.2015. Nofurther communication has been received from furtherDGCEI on the matter. Further for the year 2014-15 ademand notice for 82.07 Crores has also been receivedfrom Principal Commissioner of Service Tax, Delhi – I.M/s Baruch Dahaj Railway Company Limited and M/sKrishnapatnam Railway Company Limited had alsoreceived the similar Show Cause notices. Thesecompanies had also filled their replies to the showcause notices. After considering the detailed reply andsubsequent personal hearing, the respective AdjudicatingAuthorities had dropped the demand of service tax toM/s Baruch Dahaj Railway Company Limited and M/sKrishnapatnam Railway Company Limited. KRC hadintimated vide our letter dated 17.02.2016 to theAdjudicating Authority to consider the above orders,while finalising the Order

H-Block, Connaught Circus (Sanjeev Sharma) New Delhi - 110001 Company Secretary 24th July 2018 M.No. F3640. KKKutch Railway Company Limited 6 CIN: U45202DL2004PLC124267 DIRECTORS' REPORT To The Shareholders Kutch Railway Company Limited Your Directors have pleasure in presenting the 14th