On behalf of the Board of Directors of Rail Vikas Nigam Limited I extend a very warmwelcome to all of you on the occasion of the 15th Annual General Meeting of the Company.The audited accounts of the Company for the financial year 2017-18 along with theDirectors Report and reports of Auditors and comments of Comptroller and AuditorGeneral of India have already been circulated and with your permission I take them asread.
At the outset I would like to take this opportunity to thank all our shareholders forthe unstinted support and encouragement to the functioning of the Company. You all havealways been there to ensure that RVNL is enabled to work effectively to fulfil its mandatefor which it has been setup.
As we are all aware your Company was established with the mandate of fast trackimplementation of rail infrastructure projects working for and on behalf of Ministry ofRailways as an executing agency. It is indeed with a great deal of satisfaction that Ican report that RVNL has continuously endeavoured to meet the expectations of the RailwayAdministration which is reflected in the consistent improvement in theyear on yearphysical and financial performance of the Company. The contribution of RVNL to thebuilding of rail infrastructure in the country is amply demonstrated by the presence ofthe Company in 41 Project Implementation Units established at 25 locations across thelength and breadth of the country. RVNL is executing projects in all the Zonal Railwaysand 19 States of the Country.
In the past few years there has been a paradigm shift in the execution ofinfrastructure projects on Indian Railways. On the financial side the Ministry has madeinnovative efforts to ensure the availability of adequate funds so that there is noimpediment in project execution with an emphasis on removal of operational bottlenecksand capacity augmentation works. On the physical side while the completion of projects isbeing monitored there is now a focus on the commissioning of projects to ensure that theassets built are brought to productive use as soon as possible.
In 2017-18 RVNL increased its expenditure on project execution from Rs. 5919.62 croreto Rs. 7556 crore which excludes the element of Rs. 621 crore as GST. This reflects anincrease of 27.65%. While the turnover (excluding GST) from projects of the Ministryincreased to Rs. 4894.33 crore from Rs. 3864.98 crore in the
previous year the expenditure on works (excluding GST) undertaken for SPVs and otherdeposit works increased to Rs. 1356.35 crore during 2017-18 in comparison to Rs. 1025.29crore in the previous year.
Profit Before Tax increased from Rs. 481.38 crore in 2016-17 to Rs. 564.15 crore in2017-18 and Profit After Tax (PAT) of the Company is at Rs. 469.66 crore showing anincrease of 23.07% overfhe previous year.
In view of the improved financial performance and in line with the directions ofDepartment of Public Enterprises and the Ministry for payment of Dividend the Directorsof your Company have recommended payment of the highest ever final dividend of Rs. 167.57crore for 2017-18 to the Ministry of Railways compared to Rs. 154.50 crore in theprevious year. As a result the effective management fee of RVNL would be reduced from anaverage of 8.5% to 6.11% With the payment of final dividend the total amount paid asDividend to the Ministry will stand at Rs. 588 crore.
During the year with the focus of the Ministry on the commissioning of projects I amhappy to inform the Shareholders that your Company achieved the target of getting 475 kmof track ready for commissioning. Out of this 17 km of New Line & 400.03 km ofDoubling were commissioned and another 58.28 km Doubling was inspected by Commissionersfor Railway Safety (CRS) which could not be opened due to operational constraints of theRailways.
In comparison to completing a total of 713.73 km of project length in 2016-17 RVNLcompleted 885.5 km in 2017-18 thereby surpassing all previous achievements. This included315.2 km of Doubling and 425 km of Railway Electrification 17 km of New Line 86.3 km ofGauge Conversion and 42 km of Metropolitan Transport Project.
The completed sections of important doubling projects include Daund-GulbargaHospet-Tinaighat Bina- Kota Raipur-Titlagarh Sambalpur-Titlagarh etc. During the yearHabibganj-Bina block section was completed thus completing the full project(Habibganj-Bina 3rd line).
The Company has also contributed substantially to the commissioning of RailwayElectrification projects during the year. In 2017-18 RVNL commissioned 604.97 km of pureRailway Electrification works on important routes including 171.96 km ofPune-Wadi-Guntakal RE 131.3 km of Chhapra-Balia-Gazipur- Varanasi-Allahabad section79.86 km of Jakhal-Hisar RE 74 km of Maheru-Hissar RE 63.34 km of Amla-Chaindwara-Kulumna RE 44.62 km of Raipur-Titlagarh RE 27.2 km of Rewari-Maheru RE and12.69 km of MMTS Phase-ll. In addition 156.49 km of RE was completed with doublingprojects.
Over the years Your Company has gained substantial experience and built capacity forcommissioning of signalling works associated with Doubling third line Intermediate BlockSignalling and yard remodelling. In 2017-18 RVNL executed 100 non-interlocking ofstations for commissioning of works which is the highest till date. This included 60stations on 4th line 3rd line and Doubling projects 25 stations on RailwayElectrification 30 Mid-section Level Crossing Gates interlocking and 15 IBS/auto signal.The Company has also been able to successfully commission telecom works involving layingof optic fibre cables and 6 Quad cables of a total of 520 km.
On behalf of the Board of Directors of the Company I would like to place on record ourdeep appreciation for the proactive support extended by Railway Board and the GeneralManagers and Officers of the Zonal Railways without which the commissioning of railwayprojects done by your Company in 2017-18 would not have been possible.
Progress is also being made on the new hill rail projects assigned to RVNL that isthe Rishikesh- Karnaprayag section in Uttarakhand and Bhanupali-Bilaspur-Beri section inHimachal Pradesh. Subsequent to finalisation of the alignment and sanction of the DetailedEstimate for the former the process of land acquisition is at an advanced stage andforest clearance has been obtained. While project execution has commenced in the firstblock section if is planned that the award of contracts for construction of funnels willbe completed during this year. The alignment of the Bhanupali-Bilaspur-Beri section hasbeen finalised using the latest DEM technology based on which the Detailed Estimate isbeing prepared forsanction.
In the past few years RVNL has shown its capability for planning and delivery of Stateof the Art Railway Workshops and augmentation of capacity of Production Units. Upto2016-17 RVNL had successfully completed 5 projects and in 2017-18 work was completed onthe 250 high horse power Locoshed at Barauni. At present 02 number of Workshop projectsare under an advanced stage of progress.
The construction of the Indian Railway Institute of Financial Management atSecunderabad the first institutional building being constructed by RVNL is progressingsatisfactorily and it is expected to be completed this year.
The projects related to extension of Kolkata Metro have been delayed due to variousissues such as nonacquisition of land awaiting various clearances and removal ofhindrances by the local authorities.
I am happy to report that with the proactive involvement of the Ministry of Railwaysand State Government the projects have now been given the required push and thecommissioning of lines will commence from 2019-20 onwards.
ADB has agreed to provide a multi-tranche financing facility of US $ 500 million forfunding of 5 projects. With the signing of the loan agreement for the 3rd tranche of US $120 million in March 2018 the total financing facility to be availed has increased to US$ 390 million. During the year 2017-18 an amount of Rs. 230.18 crore equivalent to $35.90 million has been claimed for reimbursement from the ADB. Execution of the ADB fundedprojects is in progress.
Special Purpose Vehicles
RVNL has taken the lead for establishing six joint venture Special Purpose Vehicles(SPVs) in partnership with various stakeholders including Ports Mines State Governmentsetc. for implementation of rail connectivity project. RVNL has contributed an equity ofonly Rs. 649 crore against which project worth Rs. 6703 crore are being implemented withcontribution of equity by the project partners and raising of funds through FinancialInstitutions.
The project works of the Kutch Railway Company Ltd. Bharuch Dahej Railway Company Ltd.and Krishnapatnam Railway Company Ltd. (partly) have been completed and are underoperations. These SPVs are contributing substantially to the total revenues of theRailways. However certain issues affecting the financial position and operations of theSPVs are under consideration of the Ministry of Railways for resolution.
In Krishnapatnam Railway the work on the section between Venkatachalam andObulavaripalle is in progress. This section has two funnels with a total length of about7.7 km which were completed this year in record time of 25 months. However the issue offunding of the balance portion of the project is to be
addressed. Doubling of 270 km of the Kufch Railway line between Palanpurand Samakhialiwhich is being funded completely by the SPV at an estimated cost of Rs. 1400 crore hasbeen taken up by RVNL on behalf ofthe SPV and work is proceeding satisfactorily. Thephysical works on Haridaspur-Paradip and Angul- Sukinda New Line projects are in progress.
Human Resource Development
The primary focus of RVNL Management has been to have not only a team of highlymotivated skilled and experienced manpower but also retain them by facilitating a rightenvironment competitive perks and ample opportunities for a better career progressionthrough training and support. It is worth mentioning that all the above milestones havebeen realized with an on-roll staff strength of only 541 regular personnel which include150 regular employees and 391 deputationists. To maintain a lean and thin organizationalstructure the Company makes continuous efforts to streamline the systems and proceduresthrough various measures such as introducing a Standard Bill of Quantities for differenttypes of works awarding composite contracts incorporating all aspects of CivilElectrical and S&T works floating multi-package tenders to reduce multipleevaluations etc.
Corporate Social Responsibility
RVNL is conscious of its Corporate Social Responsibility. During 2017-18 the Companyspent Rs. 7.67 crore (approximately 2.12% ofthe average net profit of last three financialyears) on CSR initiatives compared to Rs. 6.12 crore in the previous year. The main focusofthe Company is in the areas of education health and sanitation with implementation ofCSR projects by Ramakrishna Mission TERI Sulabh International etc. Some ofthesignificant projects undertaken under CSR are providing 180 Bedded Hospital Facilities fortreatment of female & child patients at Ramakrishna Mission Sevashrama (RKMS)Vrindaban Education for under privileged differently abled children in the backwardareas of West Bengal Hostel Facilities for 120 Girl Nursing Students providing communitytoilet blocks at different places in the country under Swatchh Bharat Abhiyan.
Your Companys CSR initiatives have been appreciated by the ParliamentaryCommittee on CSR the target population and lauded by the Tata Institute of SocialScience the CSR hub in its social audit.
It is with a great deal of satisfaction that I can report to the Shareholders based onthe overall performance your Company has been rated as Excellent byDepartment of Public Enterprises for the financial year 2016-17 for the 7th consecutiveyear. The grading achieved by your Company was the highest among the Railway CPSEs. RVNLgot 100 out of 100 marks along with 7 others out of 181 CPSEs assessed byDPE.
For 2017-18 also all the performance targets set under various parameters in theMemorandum of Understanding with Ministry of Railways and Department of PublicEnterprises Ministry of Heavy Industries have been achieved. Based on the overallperformance it is expected that your Company will achieve an Excellent ratingfor the financial year 2017-18 also.
RVNL maintains a robust system of checks and balances to ensure that the authority ofdecision making is exercised with due care and responsibility to meet the aspirations ofShareholders and society. Your
Company complies meticulously with all legal requirements and Government guidelinesregarding Corporate Governance. A Report on Corporate Governance and Management Discussionand Analysis forms part of the Annual Report.
Mr Safish Agnihofri who had been MD and CMD of the Company for 81/2 years demittedoffice on superannuation on 31st August 2018. RVNL made tremendous progress during histenure at the helm of affairs On behalf of all of us I place on record our sincereappreciation and gratitude for his contribution.
In the end I would like to mention that all the achievements of RVNL would not havebeen possible without the support provided by the Zonal Railways. I am also grateful forthe encouragement and confidence reposed in RVNL by the Chairman and Members of theRailway Board and other officers so that RVNL has been able to contribute substantiallyto the development of rail infrastructure in the country.
I express my sincere thanks to our esteemed Shareholders Ministry of RailwaysMinistry of Finance Department of Public Enterprises Ministry of Heavy Industries theState Governments Zonal Railways ADB IRFC Financial Institutions C&AGsoffice our bankers and stakeholders in various railway projects and national andinternational contractors for their unstinted cooperation to RVNL. I would also like toplace on record my deep appreciation for the devotion and dedication of all my fellow RVNLemployees who have been pillars of strength for the Company and have delivered their bestdespite various difficulties and obstacles.
| ||(Pradeep Gaur) |
| ||Chairman & Managing Director |
|New Delhi || |
|Date: 18th September 2018 || |