About
Rites Ltd
RITES Limited is a Miniratna (Category-I) Schedule A' Central Public Sector Enterprise was established under Ministry of Railways, Government of India, in April 26, 1974. The Company is a leading multidisciplinary engineering & consultancy organization providing customized, competitive, diversified, and comprehensive, concept to commissioning services and integrated solutions in the transport and infrastructure sector in India and abroad. The services provided by RITES cover transport and infrastructure sectors such as railways, highways, airports, ports, ropeways, urban transport, inland waterways and renewable energy etc.
RITES is a wholly owned subsidiary of Indian Railways, Ministry of Railways, Government of India and has so far served clients in more than 55 countries across Asia, Africa, Latin America, South America and Middle East region and is presently serving in Sri Lanka, Bangladesh, Nepal, Mozambique, Mauritius and Botswana.
RITES Limited was incorporated by the Ministry of Railways, Government of India (MoR) and has the benefit of being associated with the Indian Railways, which is the fourth longest rail network in the world. Since the inception in 1974, it has evolved from its origins of providing transport infrastructure consultancy and quality assurance services.
In India, the clients include various central and state government ministries, departments, instrumentalities as well as local government bodies and public sector undertakings. These include Indian Railways, NTPC, Dedicated Freight Corridor Corporation of India Limited, High Speed Rail Corporation of India Limited, Public Works Department, DMRC, Steel Authority of India Limited, Rashtriya Ispat Nigam Limited, Hindustan Petroleum Corporation Limited, Bharat Coking Coal Limited, Metro Link Express for Gandhinagar and Ahmedabad (MEGA) Company Limited, Indian Port Rail Corporation Limited, Airports Authority of India, among others. We also engage with various large private sector corporations including L&T Metro Rail (Hyderabad) Limited, Kanti Bijlee Utpadan Nigam Limited (KBUNL), Cimmco Limited, Titagrah Wagons Limited, Snowmex Engineers Limited, Unity Infraprojects Limited, Rajdeep Buildcon Private Limited, Mahalsa Constructions Private Limited, Marymatha Constructions Limited, AFCON Infrastructure Limited, INCAP, ARK Services, MNEC Consultants Private Limited, Indian Geotechnical Services Limited, Geokno India Private Limited and NATRIP Implementation Society among others.
RITES Limited was incorporated as a Private Limited Company with the name Rail India Technical and Economic Services Private Limited' on April 26, 1974. The word Private' was deleted from name of the Company on February 17, 1976. During the year 1975-76, the company entered into a consultancy agreement for conducting techno-economic study for Syrian Railways.
During the year 1985-86, the company established geotechnical centre for field and laboratory investigations. During the year 1994-95, the company bagged an export contract for supply of diesel locomotives to Nepal Railways. During the year under review, the company bagged a consultancy project for providing services in relation to the Mass Rapid Transit System for Delhi Government.
During the year 1998-99, the company entered into a contract with Delhi Metro - Phase I project for providing construction management and consultancy services to Delhi Metro Rail Corporation Limited. The name of the company was changed to its present name, RITES Limited' on March 28, 2000.
During the year 2004-05, the company bagged an order to provide design consultancy services for the 12.5 km long railway tunnel in India, the Pir- Panjal railway tunnel.
During the year 2005-06, RITES Limited was granted Mini Ratna category-I status. During the year under review, the company executed its first overseas contract agreement for the lease of Locomotives in Mozambique. During the year under review, the company's proposal for providing design, construction supervision and post construction services for Francistown-Ramakgwebana Road project, Botswana was accepted.
During the year 2007-08, RITES Limited was upgraded to Schedule A' Public Sector Enterprise. The company was converted into a public limited company on February 5, 2008.
During the 2009-10, the company formed a Joint Venture Company (JVC) with SAIL for manufacturing of wagons, including high end specialized wagons for Indian Railways and other domestic and overseas customers.
During the year 2012-13, the company formed a subsidiary in collaboration with Indian Railways for generation and procurement of power, including through renewable energy.
In 2016-17, the company entered into an agreement with Metro Express Limited for providing construction management services for the Metro Express Project in Mauritius. During the year under review, the company bagged off-shore construction management project of metro in Mauritius. During the year under review, the company entered into railway concessioning agreement on PPP model by forming an SPV for Bhuj-Naliya corridor. During the year under review, the company secured highest value export order of about Rs 680 crore from Sri Lankan Railways for supply of locomotives and DMUs. During the year 2016-17, the company recorded higher ever revenue of over Rs 1500 crore in the history of the company.
The Government of India offloaded 2.52 crore equity shares of RITES Limited via an initial public offer (IPO) during the period from 20 June 2018 to 22 June 2018. There was no fresh issue of shares from the company. The IPO was priced at Rs 185 per share. The shares were listed on the bourses on 2 July 2018. After the successful completion of the IPO, the Government of India's stake in RITES Limited came down to 87.38% from 100%.
On 25 September 2018, RITES Limited informed the stock exchanges that it has remitted second tranche of investment for an amount of Rs 24.70 lakh on 24 September 2018 to subscribe to the right issue of its joint venture company BNV Gujarat Rail Private Limited. Earlier, the Board of RITES Limited at its meeting held on 16 September 2016 had approved investment upto Rs 65 crore in the equity shares of the joint venture company to acquire its 26% stake. First tranche of investment of Rs 1.30 lakh was made in the joint venture company on 20 February 2017.
During the year 2018-19, the Company completed projects like Design and designer's association & services during construction for state of Art 4.94 km long 'Rail cum Road Bridge across river Brahmaputra at Bogibeel near Dibrugarh, Assam' for NF Rly which has been commissioned on 25th December, 2018 by the Hon'ble Prime Minister and (ii) Feasibility Study of Mumbai - Chennai High Speed
Railway line (1300 km) and Final Location Survey and GT Investigations for Mumbai - Ahmedabad High Speed Railway line (508 km) for National High Speed Railway Corporation (NHRCL), using Aerial LiDAR survey (iii) Final Alignment Design and GAD of critical bridge of Mumbai - Ahmedabad High Speed Railway Line for JIC led Japanese Consortium. It secured new business for supply of 160 Broad Gauge passenger coaches to Sri-Lanka and Locomotives spares to Myanmar Railways.
During the year 2019-20, Company completed supply of six DEMU trainsets (Diesel Electric Multiple Units) and 10 locomotives to Sri Lanka and based on the quality of the product supplied. It executed many prestigious projects, which include consultancy for capacity enhancement through Semi-High speed and High Speed Railway Lines, detailed design of alignment for Delhi - Ghaziabad - Meerut Line for RRTS Corridor. It also worked upon the DPRs for 9 railway tunnels, rail-based Mass Transit Systems for Gorakhpur, Allahabad, Chennai, Vijayawada, Jammu, Srinagar, Thane, Nagpur, Mumbai, Kanpur and Agra, rail infrastructure for DVC, NTPC, CIL and Others at different locations, railway station development project for Ayodhya and Varanasi, and road projects under Bharatmala Scheme in
West Bengal, Punjab & Haryana. It completed 188kms of Railway electrification and 83kms of track work.
During the year 2020-21, the Company provided consultancy services for various railway projects including Dedicated Freight
Corridor (DFC), High-Speed Passenger Corridors, Semi High-Speed Corridors, Rail connectivity for Industry/ports for bulk movement of freight, capacity augmentation projects, Railway electrification, Signaling and telecommunication, Metropolitan Transport Projects, Production Units & Workshop Modernization, Traffic studies, Port Connectivity Projects, Energy and sustainability, Detailed Engineering of bridges, tunnels and geotechnical investigations, including condition monitoring of railway bridges & other assets in domestic business. It commissioned Ropeway Projects at Jammu (J&K), Rajgir (Bihar), PMC for Central University at Pondicherry, Gulbarga, Kasargod, Gaya, Allahabad, NIT/Meghalaya, Business Park of NSIC, Heritage Building of Allahabad University, Quality Assurance
of new AIIMS at Manglagiri, Madurai, Bibinagar, Deoghar, Gorakhpur, Raibaraeli, Bathinda, Bilaspur, Nagpur, Kalyani and Guwahati, maintained Rolling Stock & Workshop Equipment at various locations of NTPC like Rihand, Singrauli, Sipat, Talcher, Kahalgaon & Farakka. It provided services for Detailed Project Reports (DPRs) for railway tunnels for East Coast Railway, 3 highway tunnels for NHIDCL, establishment of the CORE Network for Mumbai-Ahmedabad and final alignment design for Delhi-Ahmedabad High Speed Rail Corridors, and National Rail Plan for Ministry of Railways. On the turnkey front, it completed electrification works between Sawai Madhopur - Jaipur - Ringas Section (188 km) and Vijaypur - Maksi section (188 km) and further secured work for electrification of
around 489 RKM.
During the year 2021, the Company has acquired 24% stake in Indian Railway Stations Development Corporation Limited (IRSDC), a company involved in modernization of railway stations and development of assets along the railway stations for Rs. 48 crore.
During the year 2021, the Company not only signed contract for supplying 06 Cape Gauge AC-AC Traction Diesel Electric Locomotives and 90 Cape Gauge Passenger Coaches, including 05 sets of DEMUs, to CFM Mozambique but supplied 2 locomotives despite supply chain disruptions. Besides export of rolling stock, it consolidated its position abroad in consultancy projects by taking up projects such as Project Management Consultancy (PMC) for 4-Lane National Highway project in Bangladesh and Construction Supervision Services for Metro Express project in Mauritius, Design & PMC services for Development of Infrastructure at airport in Mauritius, Design and PMC for development of Integrated Check Post at Nepalgunj in Nepal and Consultancy for old runway rehabilitation at Gautam Buddha International Airport, Nepal.
In 2022-23, RITES commissioned Consultancy services for Shivamogga Airport; opened Consultancy services for Mauritius Metro Phase III Project; supplied 1 locomotive, 4 DEMU trainsets and 25 passenger coaches to CMF, Mozambique. Further, Railway doubling works of Gotty-Dharmavaram commissioned in 2023; Construction of DEMU/MEMU Shed at Lumding, in Assam commenced; Mavali-Bari Sadri Railway Electrification Works commissioned and Highway Khardungla Projects commissioned.
Rites Ltd
Chairman Speech
Dear Shareholders,
It's an honour and a privilege to lead this organisation that prides
itself in delivering consistent results, creating value for stakeholders, and nurturing a
brand that is entering its 50th year.
If there is one overriding theme that defines the current business
ecosystem, it is that the environment is expeditiously evolving, redefining the norm.
Rising to this challenge and leveraging its core strength and expertise, coupled with
efficient execution, the performance of your Company in FY23 underscored its position as a
'Go-To' infrastructure consultancy Company. The Company achieved its highest-ever
consultancy revenue in FY23 and under its strategic initiative 'RITES Videsh', it also
registered the highest-ever international consultancy revenue. Leveraging its strength and
tapping opportunities across sectors, your Company secured record consultancy orders
during the year.
Your Company achieved a consolidated revenue of Rs 2,730 crore against
Rs 2,745 crore in FY22. The operating revenue, excluding other income, stood at Rs 2628
crore against Rs 2,662 crore in FY22; the impact of significant downtick in the exports
revenue. Despite the revenue being flat, we managed to deliver higher profits compared to
last year. Profit Before Tax stood at Rs 774 crore as against Rs 735 crore in FY22, up by
5.3%, and Profit After Tax at Rs 571 crore as against Rs 539 crore in FY22, up by 6%,
thus, reaffirming our strategy of profitability being the key focus.
Encouraged by the performance of the Company, your Board of Directors
has
recommended Rs 6 per share as a final dividend in addition to the three
interim dividends totalling Rs 14.5 per share which have already been paid during the
year. The total dividend of Rs 493 crore at Rs 20.5 per share, takes the dividend payout,
on accrual basis, to the highest ever, being 92.8% of the profits earned.
Your Company specialises in handholding clients with their projects
from the early stages of planning and ideation to seeing these ideas come to reality,
ensuring effective execution and beyond, with a focus on staying ahead of the curve and
adapting future-ready practices. By maintaining a sustainable approach towards operational
performance excellence, it has, once again, demonstrated the ability of efficient and
disciplined execution of various complex projects. Consultancy services for the Shivamogga
Airport, Mauritius Metro Phase-III, Supply of locomotives, DEMU trainsets and Passenger
coaches to CFM, Mozambique, Railway doubling works of Gooty-Dharmavaram, DEMU/MEMU Shed at
Lumding, Assam, Mavli-Bari Sadri Railway Electrification, Highway projects across the
country and abroad, are a few of the examples of our multi-sectoral presence.
Leveraging our strength and presence across all areas of infrastructure
growth, your Company continues to focus on taking on more works in niche areas. With these
concerted efforts, your Company secured orders of more than Rs 3,000 crore and ended the
year with a healthy order book of Rs 5,870 crore, 19% higher than last year. Third Party
Inspection for works under the Jal Jeevan Mission, PMC for Railway sidings at multiple
locations, Depot construction work for Bengaluru metro, DPR for tunnels between Abu Road
and Taranga Hill, and Consultant for the Ahmedabad Metro Rail Project Phase-II etc. were
some of the orders across verticals.>
Taking forward its vision for sustainable consultancy, a dedicated
Sustainability Unit was created and in a short period, it has started getting orders in
the fields of NCAP, Swachh Bharat Mission etc.
Your Company's thrust on the RITES Videsh strategic initiative, for
consolidating the international business revenue both in the rolling stock exports as well
as the project consultancy streams, is being aggressively pursued across continents. As a
result, your Company has witnessed some green shoots in the recent past and is looking to
securing finite export orders in this financial year, as well as more international
project consultancy orders.
Your Company's Subsidiaries and Joint Ventures - REMCL, SRBWIPL, and
RAPL, have contributed ably to the overall performance. REMCL has shown 22.6% growth in
the operating revenue and 30.2% jump in profits and will play an important role in Indian
Railways' Mission of achieving Net Zero Carbon Emissions. With order from private clients
as well, SRBWIPL is aiming at stepping up production in the coming years. RAPL is pitching
to secure orders across sectors in the African region.
'Changing Lives, our CSR initiative, continues to be a core tenet of
your Company delivering its commitment to bring about a lasting and holistic impact for
enhancing social value. With a contribution of Rs 14.10 crore towards CSR activities in
FY23, these encapsulate a large gamut, including health, women empowerment, and skill
development, with an emphasis on aspirational districts across the country.
Your Company is guided by a strong value system and takes pride in
being a responsible corporate entity. Abiding with laws & regulations, emulating
corporate governance practices, and ingraining a culture of compliance, accountability,
transparency, and ethical conduct across the organisation, it is upholding the best
interests of its stakeholders. Your Company's highest degree of compliance and
transparency was recognised, and we were honoured to receive the ICAI Award for Financial
Reporting and the South Asian Federation of Accountants (SAFA) Gold Award for the Best
Presented Annual Report.
Our purpose-driven approach to business and our values are aimed at
shaping a 'RITES culture' that makes our resources Future-Ready, embraces the
people-centric approach and promotes parity & purpose at the workplace. Also, it's a
matter of pride for us that this approach of valuing human capital was recognised with the
'Dream Companies to Work For' Award at the World HRD Congress-2023.
Your Company's diversified business portfolio, strong order pipeline
and expanding global footprints are promising and reliable signposts for the exciting
times ahead.
Your Company has made, being 'Future- Ready', its core mission. With
close to five decades of experience, we are strongly positioned to build up on our legacy
and tap the infrastructure growth opportunities through a three-pronged approach: Innovation,
Execution and Transformation.
All the above would not have been possible without the continuous
support and guidance of our parent Ministry and our stakeholders for which we are
thankful. As we look ahead, given the trust of our clients, the strength of our
capabilities, the dedication of 'Team RITES', and the guidance of our Board, we remain
confident of our ability to build up on our position of being the 'Go-To Consultant' for
infrastructure projects across sectors.
  Â
Rites Ltd
Company History
RITES Limited is a Miniratna (Category-I) Schedule A' Central Public Sector Enterprise was established under Ministry of Railways, Government of India, in April 26, 1974. The Company is a leading multidisciplinary engineering & consultancy organization providing customized, competitive, diversified, and comprehensive, concept to commissioning services and integrated solutions in the transport and infrastructure sector in India and abroad. The services provided by RITES cover transport and infrastructure sectors such as railways, highways, airports, ports, ropeways, urban transport, inland waterways and renewable energy etc.
RITES is a wholly owned subsidiary of Indian Railways, Ministry of Railways, Government of India and has so far served clients in more than 55 countries across Asia, Africa, Latin America, South America and Middle East region and is presently serving in Sri Lanka, Bangladesh, Nepal, Mozambique, Mauritius and Botswana.
RITES Limited was incorporated by the Ministry of Railways, Government of India (MoR) and has the benefit of being associated with the Indian Railways, which is the fourth longest rail network in the world. Since the inception in 1974, it has evolved from its origins of providing transport infrastructure consultancy and quality assurance services.
In India, the clients include various central and state government ministries, departments, instrumentalities as well as local government bodies and public sector undertakings. These include Indian Railways, NTPC, Dedicated Freight Corridor Corporation of India Limited, High Speed Rail Corporation of India Limited, Public Works Department, DMRC, Steel Authority of India Limited, Rashtriya Ispat Nigam Limited, Hindustan Petroleum Corporation Limited, Bharat Coking Coal Limited, Metro Link Express for Gandhinagar and Ahmedabad (MEGA) Company Limited, Indian Port Rail Corporation Limited, Airports Authority of India, among others. We also engage with various large private sector corporations including L&T Metro Rail (Hyderabad) Limited, Kanti Bijlee Utpadan Nigam Limited (KBUNL), Cimmco Limited, Titagrah Wagons Limited, Snowmex Engineers Limited, Unity Infraprojects Limited, Rajdeep Buildcon Private Limited, Mahalsa Constructions Private Limited, Marymatha Constructions Limited, AFCON Infrastructure Limited, INCAP, ARK Services, MNEC Consultants Private Limited, Indian Geotechnical Services Limited, Geokno India Private Limited and NATRIP Implementation Society among others.
RITES Limited was incorporated as a Private Limited Company with the name Rail India Technical and Economic Services Private Limited' on April 26, 1974. The word Private' was deleted from name of the Company on February 17, 1976. During the year 1975-76, the company entered into a consultancy agreement for conducting techno-economic study for Syrian Railways.
During the year 1985-86, the company established geotechnical centre for field and laboratory investigations. During the year 1994-95, the company bagged an export contract for supply of diesel locomotives to Nepal Railways. During the year under review, the company bagged a consultancy project for providing services in relation to the Mass Rapid Transit System for Delhi Government.
During the year 1998-99, the company entered into a contract with Delhi Metro - Phase I project for providing construction management and consultancy services to Delhi Metro Rail Corporation Limited. The name of the company was changed to its present name, RITES Limited' on March 28, 2000.
During the year 2004-05, the company bagged an order to provide design consultancy services for the 12.5 km long railway tunnel in India, the Pir- Panjal railway tunnel.
During the year 2005-06, RITES Limited was granted Mini Ratna category-I status. During the year under review, the company executed its first overseas contract agreement for the lease of Locomotives in Mozambique. During the year under review, the company's proposal for providing design, construction supervision and post construction services for Francistown-Ramakgwebana Road project, Botswana was accepted.
During the year 2007-08, RITES Limited was upgraded to Schedule A' Public Sector Enterprise. The company was converted into a public limited company on February 5, 2008.
During the 2009-10, the company formed a Joint Venture Company (JVC) with SAIL for manufacturing of wagons, including high end specialized wagons for Indian Railways and other domestic and overseas customers.
During the year 2012-13, the company formed a subsidiary in collaboration with Indian Railways for generation and procurement of power, including through renewable energy.
In 2016-17, the company entered into an agreement with Metro Express Limited for providing construction management services for the Metro Express Project in Mauritius. During the year under review, the company bagged off-shore construction management project of metro in Mauritius. During the year under review, the company entered into railway concessioning agreement on PPP model by forming an SPV for Bhuj-Naliya corridor. During the year under review, the company secured highest value export order of about Rs 680 crore from Sri Lankan Railways for supply of locomotives and DMUs. During the year 2016-17, the company recorded higher ever revenue of over Rs 1500 crore in the history of the company.
The Government of India offloaded 2.52 crore equity shares of RITES Limited via an initial public offer (IPO) during the period from 20 June 2018 to 22 June 2018. There was no fresh issue of shares from the company. The IPO was priced at Rs 185 per share. The shares were listed on the bourses on 2 July 2018. After the successful completion of the IPO, the Government of India's stake in RITES Limited came down to 87.38% from 100%.
On 25 September 2018, RITES Limited informed the stock exchanges that it has remitted second tranche of investment for an amount of Rs 24.70 lakh on 24 September 2018 to subscribe to the right issue of its joint venture company BNV Gujarat Rail Private Limited. Earlier, the Board of RITES Limited at its meeting held on 16 September 2016 had approved investment upto Rs 65 crore in the equity shares of the joint venture company to acquire its 26% stake. First tranche of investment of Rs 1.30 lakh was made in the joint venture company on 20 February 2017.
During the year 2018-19, the Company completed projects like Design and designer's association & services during construction for state of Art 4.94 km long 'Rail cum Road Bridge across river Brahmaputra at Bogibeel near Dibrugarh, Assam' for NF Rly which has been commissioned on 25th December, 2018 by the Hon'ble Prime Minister and (ii) Feasibility Study of Mumbai - Chennai High Speed
Railway line (1300 km) and Final Location Survey and GT Investigations for Mumbai - Ahmedabad High Speed Railway line (508 km) for National High Speed Railway Corporation (NHRCL), using Aerial LiDAR survey (iii) Final Alignment Design and GAD of critical bridge of Mumbai - Ahmedabad High Speed Railway Line for JIC led Japanese Consortium. It secured new business for supply of 160 Broad Gauge passenger coaches to Sri-Lanka and Locomotives spares to Myanmar Railways.
During the year 2019-20, Company completed supply of six DEMU trainsets (Diesel Electric Multiple Units) and 10 locomotives to Sri Lanka and based on the quality of the product supplied. It executed many prestigious projects, which include consultancy for capacity enhancement through Semi-High speed and High Speed Railway Lines, detailed design of alignment for Delhi - Ghaziabad - Meerut Line for RRTS Corridor. It also worked upon the DPRs for 9 railway tunnels, rail-based Mass Transit Systems for Gorakhpur, Allahabad, Chennai, Vijayawada, Jammu, Srinagar, Thane, Nagpur, Mumbai, Kanpur and Agra, rail infrastructure for DVC, NTPC, CIL and Others at different locations, railway station development project for Ayodhya and Varanasi, and road projects under Bharatmala Scheme in
West Bengal, Punjab & Haryana. It completed 188kms of Railway electrification and 83kms of track work.
During the year 2020-21, the Company provided consultancy services for various railway projects including Dedicated Freight
Corridor (DFC), High-Speed Passenger Corridors, Semi High-Speed Corridors, Rail connectivity for Industry/ports for bulk movement of freight, capacity augmentation projects, Railway electrification, Signaling and telecommunication, Metropolitan Transport Projects, Production Units & Workshop Modernization, Traffic studies, Port Connectivity Projects, Energy and sustainability, Detailed Engineering of bridges, tunnels and geotechnical investigations, including condition monitoring of railway bridges & other assets in domestic business. It commissioned Ropeway Projects at Jammu (J&K), Rajgir (Bihar), PMC for Central University at Pondicherry, Gulbarga, Kasargod, Gaya, Allahabad, NIT/Meghalaya, Business Park of NSIC, Heritage Building of Allahabad University, Quality Assurance
of new AIIMS at Manglagiri, Madurai, Bibinagar, Deoghar, Gorakhpur, Raibaraeli, Bathinda, Bilaspur, Nagpur, Kalyani and Guwahati, maintained Rolling Stock & Workshop Equipment at various locations of NTPC like Rihand, Singrauli, Sipat, Talcher, Kahalgaon & Farakka. It provided services for Detailed Project Reports (DPRs) for railway tunnels for East Coast Railway, 3 highway tunnels for NHIDCL, establishment of the CORE Network for Mumbai-Ahmedabad and final alignment design for Delhi-Ahmedabad High Speed Rail Corridors, and National Rail Plan for Ministry of Railways. On the turnkey front, it completed electrification works between Sawai Madhopur - Jaipur - Ringas Section (188 km) and Vijaypur - Maksi section (188 km) and further secured work for electrification of
around 489 RKM.
During the year 2021, the Company has acquired 24% stake in Indian Railway Stations Development Corporation Limited (IRSDC), a company involved in modernization of railway stations and development of assets along the railway stations for Rs. 48 crore.
During the year 2021, the Company not only signed contract for supplying 06 Cape Gauge AC-AC Traction Diesel Electric Locomotives and 90 Cape Gauge Passenger Coaches, including 05 sets of DEMUs, to CFM Mozambique but supplied 2 locomotives despite supply chain disruptions. Besides export of rolling stock, it consolidated its position abroad in consultancy projects by taking up projects such as Project Management Consultancy (PMC) for 4-Lane National Highway project in Bangladesh and Construction Supervision Services for Metro Express project in Mauritius, Design & PMC services for Development of Infrastructure at airport in Mauritius, Design and PMC for development of Integrated Check Post at Nepalgunj in Nepal and Consultancy for old runway rehabilitation at Gautam Buddha International Airport, Nepal.
In 2022-23, RITES commissioned Consultancy services for Shivamogga Airport; opened Consultancy services for Mauritius Metro Phase III Project; supplied 1 locomotive, 4 DEMU trainsets and 25 passenger coaches to CMF, Mozambique. Further, Railway doubling works of Gotty-Dharmavaram commissioned in 2023; Construction of DEMU/MEMU Shed at Lumding, in Assam commenced; Mavali-Bari Sadri Railway Electrification Works commissioned and Highway Khardungla Projects commissioned.
Rites Ltd
Directors Reports
To,
The Members,
The Directors present the 49th Annual Report of RITES Ltd.
(the Company or RITES) along with the audited financial statements for the financial year
ended March 31, 2023, and Auditors' Report thereon.
FINANCIAL HIGHLIGHTS
The financial performance during the year under review (FY 2022-23) as
compared to the previous year is summarized below:
(Rs in crore)
| Particulars |
Standalone |
Consolidated |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Revenue from Operations |
2520 |
2575 |
2628 |
2662 |
| Other Income |
119 |
86 |
102 |
83 |
| Total Income |
2639 |
2661 |
2730 |
2745 |
| Profit/loss before Depreciation, Finance Costs, Exceptional
items and Tax Expense |
775 |
738 |
848 |
808 |
| Less: Depreciation/Amortisation/Impairment |
59 |
58 |
67 |
66 |
| Profit/loss before Finance Costs, Exceptional items and Tax
Expense |
715 |
680 |
781 |
742 |
| Less: Finance Cost |
7 |
5 |
7 |
7 |
| Profit/loss before Exceptional items and Tax Expense |
709 |
675 |
774 |
735 |
| Profit/loss before Tax Expense |
709 |
675 |
774 |
735 |
| Pre- Acquisition Profit of JV |
- |
- |
- |
- |
| Less: Tax Expense (Current & Deferred) |
178 |
178 |
203 |
197 |
| Profit/Loss for the Year(1) |
531 |
497 |
571 |
538 |
| Total Comprehensive Income/Loss (2) |
6 |
1 |
6 |
1 |
| Total (1+2) |
537 |
498 |
577 |
539 |
| Balance of Profit/Loss for earlier years |
2159 |
2082 |
2354 |
2240 |
| Less: Transfer to Debenture Redemption Reserve |
- |
- |
- |
- |
| Less: Transfer to Reserve |
- |
- |
- |
- |
| Less: Dividend Paid to Equity Shares |
433 |
421 |
452 |
425 |
| Less: Buy Back Expense including taxes |
- |
- |
- |
- |
| Less: Dividend paid on Preference Shares |
- |
- |
- |
- |
| Balance carried Forward |
2263 |
2159 |
2479 |
2354 |
With a well-diversified and resilient business model, RITES has
followed a trajectory uniquely rooted in India's growth story. A future-ready and
multidisciplinary consultancy organization, RITES is providing customized, diversified,
comprehensive, and concept to commissioning services and integrated solutions in the
transport infrastructure sector in India and abroad.
The company is uniquely placed in terms of geographical reach and
consultancy services in sectors such as railways, highways, airports, ports, ropeways,
metros, bridges & tunnels, urban engineering and sustainability, inland waterways, and
renewable energy. Equipped with sophisticated software (including for designs) and modern
equipment, RITES is also a unique inspection organization with in-house material-testing
laboratories with national/international accreditation/certification.
Delivering smart and sustainable solutions with a talent pool of over
2,000 professionals, and the ability to adapt to diverse market needs and foster
collaborative relationships, RITES has served clients in more than 55 countries across
Asia, Africa, Latin America, South America, and Middle East region.
During the financial year 2022-23, the company recorded consolidated
revenue of Rs 2730 crore and achieved highest-ever consultancy revenue. Additionally, our
Profit After Tax of Rs 571 crore underscores our ability to navigate market challenges and
capitalize on emerging opportunities.
The increased thrust on the expansion & upgrade of transport
infrastructure and last-mile connectivity, domestically as well as globally, provides
opportunities for technical consultancy and export of rolling stock (indigenously
developed and customised offerings), adding credence to the idea of Atmanirbhar Bharat
that calls for 'Make in India, Make for the World'. By aligning our growth plans with the
Nation's vision, we aim to further strengthen our position, embracing innovation, and
fostering sustainable practices.
STATE OF COMPANY'S AFFAIRS & OUTLOOK
Infrastructure plays a key role in facilitating and stimulating
economic growth by providing better connectivity, enabling within and trans-border
movement of people and goods and enhancing productivity and efficiency. The sector is
responsible for propelling India's overall development and draws focus from the
Government, which has unveiled various initiatives that would ensure time- bound creation
of world-class infrastructure.
The company continued to be a leading consultancy organisation
providing consultancy, design, engineering and turnkey solutions to its various clients in
India and abroad. Under its strategic initiative 'RITES Videsh', the company is tapping on
the emerging opportunities (export and consultancy) in Southeast Asia and Africa. In the
current year, the company achieved highest-ever revenue in international consultancy as
well as highest-ever consultancy revenue, leading to higher standalone profit.
'Transforming to Green, RITES has charted a roadmap to emphasize the
integration of infrastructure and green solutions, hasten green growth, and provide smart
solutions for shaping tomorrow's mobility. Under a dedicated 'Sustainability Unit', RITES
undertakes projects involving advanced sustainable solutions. Also, the company has been
embracing and advocating sustainable & cutting-edge solutions that aid in the
transition to a circular economy.
RITES' subsidiary REMC Ltd is involved in power management and
generation and has a mandate to manage the entire power procurement under open access for
Indian Railways, besides handling renewable energy and energy-efficiency projects. During
FY 2022-23, REMC Ltd. achieved highest-ever turnover of Rs 117.06 crore and profit before
tax of Rs 83.80 crore. It became debt- free during FY 2022-23. During the year, REMC Ltd
paid an interim dividend of Rs 26.25 crore ( Rs 2.5 per share) and declared final dividend
of Rs 31.50 crore ( Rs 3 per share), which is highest-ever in a financial year, subject to
the approval of shareholders.
SAIL-RITES Bengal Wagon Industry Pvt. Ltd., a joint venture of RITES
and SAIL on 50:50 basis, has manufactured 320 BCNAHSM1 wagons and 364 BOXNHL wagons during
FY 2022-23. An order has also been received from GATX for supplying 186 BOXNHL wagons and
03 Brake Vans. It had revenue of Rs 222.79 crore with profit after tax of Rs 0.33 crore
during FY 2022-23.
RITES' foreign subsidiary RITES (Afrika) (Proprietary) Limited,
Botswana, has a proven track record of executing projects in Botswana and has executed
projects from concept to commissioning for value ranging up to BWP 520.00 million. RITES
(Afrika) (Proprietary) Limited achieved the turnover of BWP 12.62 million ( Rs 7.87 crore)
and earned a net profit after tax of BWP 1.25 million ('0.78 crore) during FY 2022-23.
CHANGE IN THE NATURE OF BUSINESS
There was no material change in the nature of business of the company
during FY 2022-23.
RESERVES
The company has not transferred any amount to the reserves during FY
2022-23.
DIVIDEND
Your company has a consistent track record of dividend payment. For FY
2022-23 also, based on company's performance, the Directors have declared three interim
dividends aggregating to Rs 14.5 per equity share. The Directors have also recommended a
final dividend of Rs 6.00 per equity share. The total dividend for the financial year
2022-23 is Rs 492.62 crore (i.e. Rs 20.50 per share) which is 205% of paid-up share
capital of the company.
The total dividend payout during the year works out to be Rs 432.55
crore which includes Rs 84.11 crore final dividend for financial year 2021-22 and Rs
348.44 crore interim dividend for the financial year 2022-23.
DIVIDEND DISTRIBUTION POLICY
The Dividend Distribution Policy, in terms of Regulation 43A of the
Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 ("SEBI Listing
Regulations") is annexed to this report as Annexure -D and is also available
on the Company's website at
https://www.rites.com/Upload/upload/misc/Balancesheet/
Dividend-Distribution-Policy070619.pdf
PRESIDENTIAL DIRECTIVE
During the year, a presidential directive has been issued vide Railway
Board letter no. 20-21/PL/57/2 dated 16th Sept 2022 allowing all PSUs to
undertake all kind of businesses as deemed suitable/ appropriate by them with a view to
maximize their revenue and profit.
DEPOSITS
The company has not accepted any deposits from public during the
financial year 2022-23.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
No material changes or commitments affecting the financial position of
the company has occurred during the financial year 2022-23 and after the close of the
financial year up to the date of the report.
CAPITAL STRUCTURE
During the FY 2022-23, the paid-up share capital of the company was Rs
240.30 crore as against the Authorized Share Capital of Rs 300 crore. There was no change
in paid up and authorized capital of the company during the financial year 2022-23.
CREDIT RATING
During the financial year 2022-23, the company has received a credit
rating of IVR AAA/ Stable (IVR Triple A with stable outlook) for Long Term Bank facilities
up to an amount of Rs 1265 crore from Infomerics Valuation and Ratings Private Limited.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
The company has complied with the provisions relating to the Investor
Education and Protection Fund (IEPF) under the Companies Act, 2013 and the rules made
thereunder. Company Secretary is the nodal officer to deal with the IEPF Authorities and
compliances related thereto. No amount is due for transfer
to IEPF and details of unclaimed dividend as on March 31, 2023 are
available on the company website and has also been disclosed in the Corporate Governance
report. Further, the company does not have shares in Demat Suspense Account/ Unclaimed
Suspense Account/ Unclaimed dividend and the same has been disclosed in the Corporate
Governance report.
MEMORANDUM OF UNDERSTANDING (MoU)
Evaluation of MoU performance for the Year 2021-22 as per DPE
parameters is finalized and the company secured a rating of "Very Good" for the
year 2021-22.
The company signed Memorandum of Understanding (MoU) with the Ministry
of Railways for 2022-23 and its evaluation is under process with DPE.
During FY 2022-23, MoU includes some of the compliance parameters and
their compliance status are as follows:
| S. No. Name of Parameter |
Remarks |
| 1 Acceptance/ Rejection of Goods & Services through TReDS
Portal |
Fully Complied and nothing is pending as on 31.03.2023. |
| 2 Procurement from GeM as % of total procurement |
Fully Complied as Company has procured Rs 17.42 Crs. which is
27.58% of total Sambandh Portal (MSME) procurement as against 25% target prescribed for FY
2022-23. |
| S. No. Compliance Parameters |
Remarks |
| 1 DPE guidelines issued from time to time on CSR expenditure
by CPSEs. |
Fully Complied (Refer CSR Note) |
| 2 Target as given by NITI Aayog on Assets Monetization
Milestones |
Complied. Nil Target has been communicated by Ministry of
Railways |
| 3 Procurement of goods or services through MSEs as % of Total
procurement of goods and services |
Fully Complied as company procured Rs 25.43 Crs.from MSEs
which is 40.26% of total procurement as per Sambandh Portal as against 25% target
prescribed for FY 2022-23. |
| 4 Procurement of goods or services through SC/ST MSEs as % of
Total procurement of goods and services |
Target for procurement from Women & SC/ST were not fully
achieved due to lack of participation on account of various reasons including but not
limited to value of procurement being high. However, Company encourages participation
through these |
| 5 Procurement of goods or services through Women MSEs as % of
Total procurement of goods and services |
categories of MSEs by incorporating preferential clauses in
tender documents and following these terms in latter and spirit. It is noteworthy to
mention that Company's overall procurement from MSEs has been more than the prescribed
target for FY 202223. These 4% (SC/ST MSEs) and 3% (Women MSEs) are within the above
mentioned total 25% from MSEs. Further Public procurement policy provides that in event of
failure to participate in tender process or meet L1 requirements then sub-targets shall be
met from other MSE. Therefore Company has complied these parameters. |
| 6 Steps and initiative taken for Health & Safety
improvement of Human Resources in CPSEs (Target to be prescribed by the Administrative
Ministry) |
Target prescribed by the Ministry of Railways "100%
Covid-19 booster vaccination for those employees who opted for booster vaccination
(including regular, deputationist, contractual and outsourced)" and Company has
ensured that target given by the Ministry has been fully Complied. |
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 7.1, 8, 16, 17 &.43 (f)
(ii) of the standalone financial statement).
board of directors & KEY MANAGERIAL PERSONNEL (kmp) and number of
meetings of the board
As on 31st March, 2023, the Company had 10 Directors
comprising four Functional Directors and two Government Nominee Directors and four
Independent Directors. During the year, 8 meetings of Board of Directors were held as
mentioned below:
| Board Meeting No. |
Board Meeting Dates |
| 276 |
24.05.2022 |
| 277 |
28.07.2022 |
| 278 |
16.09.2022 |
| 279 |
26.09.2022 |
| 280 |
10.11.2022 |
| 281 |
09.02.2023 |
| 282 |
17.03.2023 |
| 283 |
27.03.2023 |
The following Directors held office during the year:
Whole-time Directors:
| Shri Rahul Mithal (DIN: 07610499) |
Chairman and Managing Director |
| Shri Gopi Sureshkumar Varadarajan (DIN: 08241385) |
Director Projects (up to 31.07.2022) |
| Shri Rahul Mithal (DIN: 07610499) |
Director Projects as Additional Charge (From
01.08.2022 to 25.09.2022) |
| Shri Bibhu Prasad Nayak (DIN: 08197975) |
Director Finance |
| Shri Arun Kumar Singh (DIN: 09747776) |
Director Projects (w.e.f. 26.09.2022) |
| Shri Anil Vij (DIN: 07145875) |
Director Technical (up to 28.02.2023) |
| Shri Amrendra Kumar Chandra (DIN: 10076614) |
Director Technical as Additional Charge
(From 17.03.2023 to 26.03.2023) |
| Dr. Deepak Tripathi (DIN: 10090267) |
Director Technical (w.e.f. 27.03.2023) |
Government Nominee Directors:
| Shri Raj Kumar Mangla |
Director |
| (DIN: 09533985) |
|
| Shri Sandeep Jain |
Director |
| (DIN: 09435375) |
|
Independent Directors:
| Dr. Godawari Mishra (DIN: 09394545) |
Director |
| Shri. Laxman Tammanna |
Director |
| Tapashi |
|
| (DIN: 01838521) |
|
| Dr. Dineshananda Goswami |
Director |
| (DIN: 09394294) |
|
| Shri Likha Togu |
Director |
| (DIN: 09470640) |
|
KEY MANAGERIAL PERSONNEL (KMP) (SECTION 203 OF THE COMPANIES ACT, 2013)
| Shri Rahul Mithal (DIN: 07610499) |
Chairman and Managing Director and Chief Executive Officer |
| Shri Gopi Sureshkumar Varadarajan (DIN: 08241385) |
Director Projects (up to 31.07.2022) |
| Shri Rahul Mithal (DIN: 07610499) |
Director Projects as Additional Charge (From 01.08.2022 to
25.09.2022) |
| Shri Bibhu Prasad Nayak (DIN: 08197975) |
Director Finance & Chief Financial Officer |
| Shri Anil Vij (DIN: 07145875) |
Director Technical (up to 28.02.2023) |
| Shri Arun Kumar Singh (DIN: 09747776) |
Director Projects (w.e.f. 26.09.2022) |
| Shri Amrendra Kumar Chandra (DIN: 10076614) |
Director Technical as Additional Charge (From 17.03.2023 to
26.03.2023) |
| Dr. Deepak Tripathi (DIN: 10090267) |
Director Technical (w.e.f. 27.03.2023) |
| Shri Joshit Ranjan Sikidar |
Company Secretary |
DIRECTORS & KEY MANAGERIAL PERSONNEL Inductions, Retirements and
Resignations
The company has inducted three Functional Directors and two Directors
superannuated during the Financial Year 2022-23. Appointment of Directors is done by the
Government of India from a pool of professionals in varied fields, with due verification
of expertise, integrity and experience.
During the Financial Year 2022-23, Shri Gopi Sureshkumar Varadarajan
(DIN: 08241385) ceased to be Director Projects of the company w.e.f. closing of working
hours on 31.07.2022 on attaining the age of superannuation. The Ministry of Railways vide
its order no. 2021/E(O)II/40/8 dated 23.09.2022 had appointed Shri Arun Kumar Singh as
Director Projects of the Company w.e.f. date of his assumption of charge. Shri Arun Kumar
Singh assumed the charge of Director (Projects) w.e.f. 26.09.2022.
Shri Anil Vij (DIN: 07145875) has superannuated from the post of
Director (Technical) w.e.f. closing of working hours on 28.02.2023. The Ministry of
Railways vide its order no. 2018/E(O)II/40/22 dated 16.03.2023 has entrusted additional
charge of the post of Director (Technical), RITES to Shri A.K. Chandra, IRSME, PED/
W&D, Railway Board till the appointment of a regular incumbent to the post or until
further orders, whichever is earlier.
Ministry of Railways vide its letter no 2021/E(O)Il/40/30 dated March
21, 2023 has appointed Dr. Deepak Tripathi (DIN: 10090267) as Director (Technical) of the
Company w.e.f. the date of assumption of charge i.e., 27.03.2023 till the date of his
superannuation or until further orders, whichever is earlier. Shri A.K. Chandra (DIN:
10076614) holding additional charge to the post of Director (Technical) of RITES Limited
ceases to be Director (Technical) of RITES Limited w.e.f. the date of appointment of Dr.
Deepak Tripathi as Director (Technical) of RITES Limited, due to appointment of regular
incumbent to the post.
DECLARATION BY INDEPENDENT DIRECTORS
As on 31st March, 2023, two positions of Independent
Directors were vacant. During the financial year 2022-23, all independent directors have
met the requirements specified u/s 149(6). The declaration as required under section
149(7) of the Companies Act, 2013 has been received from independent directors.
COMMITTEES OF THE BOARD
The Company has Audit Committee, Nomination and Remuneration Committee,
Risk Management Committee, Project Investment Committee, CSR Committee and Stakeholders'
Relationship Committee of the Board in place. The separate meeting of independent
directors was held on May 23, 2022 as per the provisions specified in regulation 25 of
SEBI (Listing Obligations and Disclosure Requirements), 2015.
The composition, number and date of meetings of such committees held
during the year and scope of the committees are provided in the report of Corporate
Governance at Annexure- A.
COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
As per the provisions of section 197(12) of the Companies Act, 2013
read with rule 5 of Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, every listed company is required to disclose the ratio of the remuneration of
each Director to the median employee's remuneration and details of employees receiving
remuneration exceeding limit as prescribed from time to time in the Director's Report.
However, as per notification dated June 5th, 2015 issued by
MCA, Government Companies are exempted from complying with the provisions of Section 197
of Companies Act, 2013. Therefore, such particulars have not been included as a part of
Director's Report.
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 Government Company, is done by the Administrative Ministry. Further, as
per Notification issued by Ministry of Corporate Affairs dated 5th June, 2015,
the provisions of the said section shall not apply to Government Company, in case the
Directors are evaluated by the Ministry or Department of the Central Government etc.
RETIREMENT OF DIRECTORS BY ROTATION
As per the Companies Act, 2013 the provisions in respect of retirement
of Directors by rotation is applicable. In view of this, all the directors, except
Independent Directors and Chairman & Managing Director [As per Article 56(h) of the
Articles of Association], will be liable to retire by rotation. Accordingly, one- third
among all other directors will retire by rotation. Accordingly, Shri Sandeep Jain
(DIN:09435375) and Shri Raj Kumar Mangla (DIN:09533985) will retire by rotation
and being eligible, offer themselves for reappointment.
directors' responsibility statement under the companies act, 2013
In pursuance of Section 134 (5) of the Companies Act, 2013, The
Directors hereby confirm that:
(a) In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation relating to material
departures;
(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;
(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.
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 2022-23 with related parties were in the ordinary course of
business and on an arm's length basis.
Your Directors draw attention of the members to Note No.43 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).
SUBSIDIARIES AND JVs SUBSIDIARIES
REMC 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.
The company has also one overseas wholly owned subsidiary company
namely RITES (Afrika) (Pty) Limited, Botswana, incorporated on 16th January
1991 and is primarily engaged in design and projects consultancy services in Botswana.
JOINT VENTURES
The company also has two joint ventures namely SAIL RITES Bengal Wagon
Industry Private Limited (50% stake in JV) and Indian Railway Stations Development
Corporation Limited (24% stake in JV) which is under winding up.
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.
AUDITORS
The Comptroller & Auditor General of India appointed the following
Statutory Auditor for the FY-2022-23:
M/s Pawan Puri & Associates, Statutory Auditors Chartered
Accountants
The Auditors' Report for the financial year 2022-23 does not contain
any qualification, reservation or adverse remark. The Report is enclosed with the
financial statements in this Annual Report.
The Board would like to place on record its sincere thanks for the
valuable services rendered by Statutory Auditors and the Branch Auditors.
SECRETARIAL AUDIT REPORT
The Board has appointed Akhil Rohatgi & Co., Practicing Company
Secretary to conduct Secretarial Audit for the financial year 202223. The Secretarial
Audit Report for the financial year ended March 31, 2023 has been placed at Annexure -
III.
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark except commenting on present strength of Independent
Directors as the number of Independent Directors on the Board was less than half of the
total strength of Board, as required under SEBI (LODR) Regulations and DPE Guidelines.
In this regard Company has received notices from Stock Exchanges
levying fine on the company. The company has replied to Stock Exchanges stating that the
power to appoint the Directors including Independent Directors vests with the Government
of India and the company has requested the administrative Ministry in this regard for
making necessary appointments.
COST RECORDS & COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed
under the provisions of section 148(1) of the Companies Act, 2013 are not applicable for
the business carried out by the company.
FRAUDS REPORTED BY THE AUDITOR
No frauds are reported by the Auditors which fall under the purview of
sub section (12) of Section 143 of the Companies Act, 2013
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
RITES has adequate internal control and audit systems for enhancement
of efficiency in operations and to ensure compliance with applicable laws, rules and
regulations. Company has structured policies and guidelines for optimal delegation of
authority for facilitation of business. RITES's internal audit is conducted by experienced
professionals and external audit firms. The internal control and audit systems are also
reviewed periodically. Corrective and preventive measures, whenever necessary, are taken
up from time to time for continuous improvement.
The internal control system has been further strengthened through the
following: -
Internal Financial Controls
The Internal Financial Control of the company is analyzed and audited
for the compliance of the internal financial control and accordingly the report on the
Internal Financial controls under clause (i) of sub-section 3 of Section 143 of the
Companies Act, 2013 is prepared and annexed to the Independent Auditor's Report. Based on
criteria established by the Company, considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls over Financial
Reporting issued by the Institute of Chartered Accountants of India, an adequate internal
financial controls with reference to the Standalone Financial Statements, were established
and operating effectively as on March 31,2023.
CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABILITY:
India, being a pioneer in the global arena, took a significant stride
by mandating Corporate Social Responsibility (CSR) through an amendment to the Companies
Act in April 2014. It is a continuing commitment by businesses to integrate social and
environmental concerns in their business operations. CSR is a concept whereby companies
integrate social and environmental concerns in their business operations and interactions
with their stakeholders.
Corporate Social Responsibility (CSR), is a tool by which an
organisation integrates social, environmental, and economic concerns into their values,
culture, decision making, strategy and operations in a transparent and accountable manner,
thereby establishing better practices to enhance and improve society sustainably for the
welfare of all. The CSR activities of the Company should take into account the
expectations of stakeholders and should comply with applicable law and be consistent with
good business norms and practices. It should act in a way that enhances society and its
inhabitants and be held accountable for any action that affects the people, their
communities and the environment.
At RITES social responsibility and sustainable development are
seamlessly integrated throughout the organisation. RITES recognizes its responsibility
toward society and strives to work consistently for its betterment by taking actions to
address societal challenges. It applies to a wide variety of company activities, which
operate in different social and environmental settings. RITES not only delivers one of the
best technological supports in the field of transport & transport infrastructure, but
it does it in a transparent sustainable & ethical manner to create a meaningful impact
on the beneficiaries.
The Companies Act, which has brought the idea of CSR to the forefront
and through its disclose-or-explain mandate, is promoting greater transparency and
disclosure. RITES is a staunch advocator of Sustainable Development and is committed to
operate in an economically, socially and environmentally sustainable manner that is
transparent and ethical. It applies to a wide variety of company
activities, which operate in very different social and environmental
settings. In line with these principles, a total amount of Rs 14.10 crore was spent during
FY 2022-23 on various CSR initiatives.
RITES has a strong corporate governance process in place to address new
industry standards and regulations as they emerge. In line with the Guidelines on CSR
issued by DPE and provisions of Section 135 of the Companies Act, 2013, a Board-level
committee has been constituted to oversee the implementation of CSR and to assist the
Board of Directors to formulate suitable policies & strategies in this regard. As on
March 31, 2023, the CSR Committee is headed by Shri Raj Kumar Mangla, Chairperson and
comprises Shri Bibhu Prasad Nayak Director Finance and Shri Laxman T. Tapashi, Independent
Director, as Members of this Committee.
A report on CSR activities as prescribed under Companies (Corporate
Social Responsibility Policy) Amendment Rules, 2021 is attached as Annexure II.
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