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Notes to Accounts of TRF Ltd.
Mar 31, 2025
Notes (Right-of-use assets and Lease liabilities) :
i. On adoption of Ind AS 116, the Company has recognised right-of-use assets and lease liabilities in relation to leases which was previously recognised as âoperating leasesâ under the principles of Ind AS 17, Leases. The right-of-use assets and lease liabilities were measured at the present value of the remaining lease payments, discounted using the lesseeâs incremental borrowing rate applied to the lease liabilities as on April 01,2019.
ii. Rs. 14.65 lakhs (March 31,2024: Rs. 23.08 lakhs) is towards lease of land and premises and are secured by the rights to the leased assets recognised in the financial statements as Right-of-use assets. The discount rate is between the range of 11.50% to 12.50% p.a.
The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is entitled for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.
The Company has one class of 12.50% 25,00,00,000 Non-Convertible Redeemable Preference Share(''NCRPS'') having a par value of Rs. 10 per share. Each Preference shareholder is eligible for one vote per share as per the terms of Section 47(2) of the Companies Act 2013 and dividend as and when declared by the Company. As per terms of Preference shares, NCRPS issued for a period not exceeding 20 years from the date of allotment shall be redeemable at par upon the maturity or redeemed early at the option of the Company in full or in part at 3 monthly intervals from the date of allotment. In the event of winding up of Company, NCRPS shall be non- participating in surplus assets and profit which may remain after the entire capital has been repaid, on winding up of the Company.
The Company has one class of 12.17% 23,90,00,000 Non-Convertible Redeemable Preference Share (''NCRPS'') having a par value of Rs. 10 per share. NCRPS carry a dividend @ 1% p.a. for first three years and 18.30% p.a thereafter for the remaining term (effective yield 12.17%). Each Preference shareholder is eligible for one vote per share as per the terms of Section 47(2) of the Companies Act 2013 and dividend as and when declared by the Company. As per terms of Preference shares, NCRPS issued for a period not exceeding 15 years from the date of allotment and shall be redeemable at par upon maturity or optional early redemption with accrued interest thereon computed on the basis of the effective yield of the instrument, at the option of the Company on a quarterly basis at 3-month intervals from the date of allotment. In the event of winding up of Company, NCRPS shall be non-participating in surplus assets and profit which may remain after the entire capital has been repaid, on winding up of the Company.
The Company has one class of 11.25% 2,50,00,000 Non-Cumulative Non-Participating Redeemable Preference Share (''NCRPS'') having a par value of Rs. 10 per share. Each Preference shareholder is eligible for one vote per share as per the terms of Section 47(2) of the Companies Act, 2013 and dividend as and when declared by the Company. As per terms of Preference shares, NCRPS issued for a period not exceeding 10 years from the date of allotment shall be redeemable at par upon the maturity or redeemed early at the option of the Company in full or in part at 3 monthly intervals from the date of allotment. In the event of winding up of Company, NCRPS shall be non- participating in surplus assets and profit which may remain after the entire capital has been repaid, on winding up of the Company.
Rights, preferences and restrictions attached to shares
The Company has 11.25% Optionally Convertible Redeemable Preference Share (âOCRPSâ) having a par value of Rs. 10 per share. Each Preference shareholder is eligible for one vote per share as per the terms of Section 47(2) of the Companies Act 2013 and dividend as and when declared by the Company. As per terms of Preference shares, OCRPS shall be convertible, (in two series), into equity shares at the option of the Company within a period of 18 months from the date of allotment or shall be redeemable at par upon maturity at the end of 18 months or redeemed early at the option of the Company at 3 monthly intervals from the date of allotment. In the event of winding up of Company, OCRPS shall be non-participating in surplus assets and profit which may remain after the entire capital has been repaid, on winding up of the Company. (Also refer note 46.03)
Nature and Purpose:
The Company has issued 11.25 % Optionally Convertible Redeemable Preference Shares (âOCRPSâ) of Rs. 1,200 lakhs on May 7, 2022 and Rs. 1,300 lakhs on May 13, 2022 aggregating to Rs. 2,500 lakhs, divided in to 2,50,00,000 preference shares of Rs. 10 each to Tata Steel Limited, on private placement basis.
The proceeds of the issue to be primarily utilized inter-alia, for repayment of the existing indebtedness of the Company, payment against long-outstanding vendor dues, for completing legacy projects and delivering other committed orders and/or for other general corporate purposes.
Nature and Purpose:
(a) Equity Component of 12.50% Non Convertible Redeemable Preference Shares:
The Company has issued 12.50% Non Convertible Redeemable Preference Shares (âNCRPSâ) of Rs. 25,000 lakhs, divided in to 25,00,00,000 preference shares of Rs. 10 each to Tata Steel Limited, on private placement basis on March 25, 2019. NCRPS are in nature of compound financial instrument, accordingly the liability portion disclosed under long term borrowings and residual portion is disclosed under other equity.
The proceeds of the issue to be primarily utilized towards repayment of the whole or a part of the existing indebtedness of the Company and/ or for general corporate purposes.
(b) Equity Component of 12.17% Non Convertible Redeemable Preference Shares:
The Company has issued 12.17% Non Convertible Redeemable Preference Shares (âNCRPSâ) of Rs. 16,500 lakhs on June 8, 2022 and Rs. 7,400 lakhs on March 1,2023 aggregating to Rs. 23,900 lakhs, divided in to 23,90,00,000 preference shares of Rs 10. each to Tata Steel Limited, on private placement basis. NCRPS are in nature of compound financial instrument, accordingly the liability portion disclosed under long term borrowings and residual portion is disclosed under other equity.
The proceeds of the issue to be primarily utilized inter-alia, for repayment of the existing indebtedness of the Company, payment against long-outstanding vendor dues, for completing legacy projects and delivering other committed orders and/or for other general corporate purposes.
(c) Equity Component of 11.25% Non Convertible Redeemable Preference Shares:
The Company has issued 11.25% Non-Cumulative Non-Participating Redeemable Preference Shares (âNCRPSâ) of Rs. 2,500 lakhs, divided into 2,50,00,000 preference shares of Rs. 10 each to Tata Steel Limited, on July 15, 2024. NCRPS are in nature of compound financial instrument, accordingly the liability portion disclosed under long term borrowings and residual portion is disclosed under other equity.
The said issue of NCRPS has been made pursuant to NCLT order and in accordance with section 55(3) of the companies Act, 2013 for redemption of existing OCRPS issued earlier to Tata Steel Limited.
(d) General reserve :
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
(e) FVOCI-Equity investment :
This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through OCI, net of amounts reclassified to the retained earnings when those assets have been disposed off.
(f) Foreign exchange fluctuation reserve :
The exchange differences on restatement of long-term receivables from non-integral foreign operations that are considered as net investment in such operations in earlier years and carried on transition to Ind AS until disposal of such net investment, in which case the accumulated balance in foreign exchange fluctuation reserve will be recognised as income / expense in the same period in which the gain or loss on disposal will be recognised.
(g) Amalgamation reserve :
Pursuant to the Scheme of Amalgamation of the erstwhile Tata Material Handling System Ltd (TMHS) and Tata Technodyne Ltd (TTDL) with the Company as approved by the Shareholders in the Court convened meeting and subsequently sanctioned by the Honâble High Court at Calcutta and the Honâble High Court at Patna (Ranchi Bench); the assets and liabilities of erstwhile TMHS and TTDL have transferred to and vested in the Company with effect from the appointed date of April 01,1999 as provided in the Scheme of Amalgamation. Accordingly, the assets, liabilities, reserves and debit balance in the Statement of Profit and Loss of erstwhile TMHS and TTDL as at April 01, 1999 have been taken over at their book values resulting to the amalgamation reserve after adjusting values of shares issued to the shareholders of TMHS and TTDL. The reserve is utilised in accordance with the relevant provisions of the Companies Act, 2013.
35. Income tax
The Company opted for the new reduced tax regime under Section 115BAA of the Act, which provides a domestic Company with an option to pay tax @ 22% (effective rate of 25.168%). The lower rate shall be applicable subject to certain conditions, including that the total income should be computed without claiming specific deductions and exemptions. Section 115BAA also provides that the provisions of section 115JB of the Act (MAT) shall not apply to a company opting for such reduced rate.
36. Segment information
36.01 Products and services from which reportable segment derives their revenues
Information reported to the Chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses based on products and services. Accordingly, directors of the Company have chosen to organise the segment based on its product and services as follows:
⢠Products & services
⢠Projects & services
The Companyâs chief operating decision maker is the Managing Director.
Revenue and expenses directly attributable to segment are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as Unallocable expenses.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as Unallocable.
The Companyâs financing and income taxes are managed on a company level and are not allocated to operating segment.
In the Companyâs operations within India there is no significant difference in the economic conditions prevailing in the various states of India. Revenue from sales to customers outside India is nil in the current and previous year and all of the Companyâs non-current assets are domiciled in India. Hence disclosures on geographical segment are not applicable.
36.06 Information about major customers
Revenue from operations amounting to Rs. 12,073.48 lakhs (March 31,2024: Rs. 13,995.92 lakhs) includes revenue relating to products and services segment of Rs. 10,351.65 lakhs (March 31,2024: Rs. 12,711.83 lakhs) pertaining to sales to the companyâs top most customer (March 31,2024: top most customer). No other single customer contributed 10% or more of the Companyâs revenue in year ended March 31,2025 and March 31,2024.
38. Employee benefit plans
38.01 Defined contribution plans
The Companyâs employee benefit plans include a number of defined contribution plans on behalf of covered employee. Any expense recognised in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The Company provides Provident Fund facility to all employees. The Company provides superannuation benefits to selected employees. The contributions are expensed as they are incurred in line with the treatment of wages and salaries. The Companyâs Provident Fund is exempted under section 17 of Employeesâ Provident Fund and Miscellaneous Provision Act, 1952. Conditions for exemption stipulate that the Company shall make good deficiency, if any, in the interest rate declared by the trust vis-a-vis interest rate declared by the Employeesâ Provident Fund Organisation. The liability as on the balance sheet date is ascertained by an independent actuarial valuation.
Provident Fund
The Company provides provident fund benefits to all employees as per applicable regulations. Contributions towards provident fund are recognised as expense for the year. The Company has set up an irrevocable Provident Fund Trust which is administered by the Trustees. The assets of the plans are held separately under the control of the trustees in case of trust. Both the employees and the Company make monthly contributions to the Fund at specified percentage of the employeeâs salary and aggregate contributions along with interest thereon are paid to the employees/ nominees at retirement, death or cessation of employment.
National Pension Scheme & Superannuation Fund
Certain employees of the Company are participants in a defined contribution plan. The Company has no further obligations to the Plan beyond its monthly contributions, which are being contributed to the Tata Robin Fraser Superannuation Fund @ 15% of basic salary of the eligible employees and such contribution are recognised as an expense when incurred. While the Company transfers the corpus to the Life Insurance Corporation of India on superannuation of the relevant employee. Total amount charged to the Statement of Profit and Loss during the year on account of the above defined contribution plans amounted to Rs. 7.24 lakhs (March 31,2024: Rs. 5.65 lakhs).
The company has moved from Superannuation Fund to National Pension Scheme from April 1,2020. The company contributes 10% of basic salary of the eligible employees to NPS. The Company has no further obligation beyond this Contribution. Total amount charged to the Statement of Profit & Loss for the year Rs. 114.46 lakhs (March 31,2024: Rs. 113.86 lakhs)
38.02 Defined benefit plans
The Company provides Provident fund and Gratuity benefit to all employees. The assets of the provident and gratuity plans are held separately under the control of the trustees of the independent trusts or with the life insurance companies. The board of trustees of the the fund composed of an equal number of representatives from both employees and employers. The board of the Fund is required by law and by the trust deed to act in the interest of the Fund and of all relevant stakeholders in the scheme. The board of trustee of the fund and management of life insurance company is responsible for the investment policy with regard to the assets of the Fund.
Provident fund benefits provided under plans wherein contributions are made to an irrevocable trust set up by the Company to manage the investments and distribute the amounts entitled to eligible employees are treated as a defined benefit plan as the Company is obligated to provide the members a rate of return which should, at the minimum, meet the interest rate declared by Government administered provident fund. A part of the Companyâs contribution is transferred to Government administered pension fund.
The Trust invests funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Government under The Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.
The Actuary has carried out actuarial valuation of planâs liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, an amount of Rs. 254.94 lakhs (March 31,2024 : Rs. 205.42 lakhs) has been provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Disclosures given hereunder are restricted to the information available as per the Actuaryâs Report.
The Company provides for gratuity, a defined benefit retirement plan (âthe Gratuity Planâ) covering eligible employees (the employees with minimum five years of continuous service). The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs last drawn salary and the tenure of employment with the Company.
The Company contributes gratuity liabilities to the Tata Robin Fraser Gratuity Fund Trust (âthe Trustâ).
The Company provides post retirement pension for retired whole-time directors. Under the said scheme, the Company pays monthly pension to retired whole-time directors based on the terms of the agreement executed with them. The same is subject to revision at periodic interval requiring approval from the board of directors. Post retirement pension plan is not funded.
The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within this framework, the Companyâs ALM objective is to match assets to the benefit obligations by investing in fixed interest securities with maturities that match the benefit payments as they fall due.
The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The company has not changed the processes used to manage its risk from previous periods. Investments are well diversified such that the failure of any single investment would not have a material impact on the overall level of assets.
These plans expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment risk: The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate
which is determined by reference to market yields at the end of the reporting period on government bonds. Currently, it has relatively balanced mix of investments in government securities and other debt instruments.
Interest risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined
benefit obligation will tend to increase. However, this will be partially offset by an increase in the value of planâs debt investments.
Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan
participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.
As such, an increase in the salary of the plan participants will increase the defined benefit obligation.
Actuarial valuation of the plan assets and the present value of defined benefit obligation were carried out as at March 31,2025 by an independent actuary, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
During the year ended March 31,2025 and March 31,2024 there was no amendment, curtailments and settlements in the gratuity plan and post retirement pension plans.
Details of defined benefit obligations and plan assets:
The fair value of the above equity and securities issued by government are determined based on quoted market prices in active markets. The fair value of other debt instruments are also determined based on quoted price in active market. The fair value of balance in special deposit scheme is determined based on its carrying value. The fair value of balance with Life Insurance Corporation is determined based on the funds statement received from the Life Insurance Corporation (LIC).
The actual return/(loss) on plan assets was Rs. 25.52 lakhs (March 31,2024: Rs. 12.97 lakhs).
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase, attrition and mortality. The sensitivity analysis given below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
⢠If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs. 104.12 lakhs (increase by Rs. 120.93 lakhs) [March 31,2024: decrease by Rs. 116.54 lakhs (increase by Rs. 136.21 lakhs)]
⢠If the expected salary increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 119.79 lakhs (decrease by Rs. 105.09 lakhs) [March 31,2024: increase by Rs. 133.60 lakhs (decrease by Rs. 116.62 lakhs)]
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected pension increase and mortality. The sensitivity analysis given below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
⢠If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs. 76.98 lakhs (increase by Rs. 86.49 lakhs) [March 31,2024: decrease by Rs. 75.40 lakhs (increase by Rs. 84.87 lakhs)]
⢠If the expected pension increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 83.23 lakhs (decrease by Rs. 75.36 lakhs) [March 31,2024: increase by Rs. 82.26 lakhs (decrease by Rs. 74.29 lakhs)]
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
(C) Compensated absence
The Company has a policy on compensated absences which are both accumulating and non-accumulating in nature.The Leave encashment benefit scheme is a salary Defined Benefit Plan that provides for a lump sum payment made on exit or encashable either by way of retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of Last Drawn Monthly Basic Salary plus Dearness Allowances and the accumulated leave balances and paid as lump sum at exit. The expected cost of accumulating compensated absences is determined by actuarial valuation. Expense on non-accumulating compensated absences is recognised in the period in which the absences occur.
This benefit includes Cash equivalent of Unutilized leave balances at the time of exit subject to Annual entitlement and ceiling of maximum encashable leave accumulation. The Company recognised a provision for compensated absence in the balance sheet amounting to Rs. 524.11 lakhs (March 31,2024: Rs. 553.52 lakhs)
38.03 Other Contributions
Employee State Insurance [Total Amount charged to the Statement of Profit & Loss for the year Rs. 13.59 lakhs (March 31, 2024: Rs. 13.58 lakhs)]
Contribution to these scheme are made by the company and Employee as required as per the statute.
39. Financial instruments
39.01 Capital management
The Company manages its capital to ensure that entities will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Capital structure of the Company consists of net debt and the total equity of the Company.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, long term liability component of NCRPS, current borrowings and lease liability, less cash and short-term deposits.
The Net debt to equity ratio for the current year improved mainly as a result of earnings of Rs. 2,762.70 lakhs and increase in equity component of Rs. 1,639.13 lakhs due to issue of Non Convertible Redeemable Preference Shares in the current year.
39.02 Financial risk management objectives and policies
The Companyâs principal financial liabilities, comprise borrowings, trade and other payables. The Companyâs principal financial assets include trade and other receivables, investments, cash and short-term deposits that derive directly from its operations. The Company is exposed to market risk (including interest rate risk and other price risk), credit risk and liquidity risk.
For instance, the delay in collection of trade receivables may put stress on the short term liquidity which is mitigated by continuous monitoring, churning and liquidating the short term investments and to minimise loss of income from short term investments.
The Company seeks to minimise the effects of these risks by exploring the possibility of investing the surplus funds in the short term portfolios.
The corporate treasury management reports on quarterly basis to the board of directors that monitors risks and policies implemented to mitigate risk exposures.
39.03 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include investment in mutual fund and other investment.
The Companyâs investment in mutual funds are basically in Overnight Funds and Liquid Funds with a shorter duration less than 1 year subject to continuous churning of the investments.
39.04 Foreign currency risk management
The Company enter into sale and purchase transactions; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period were nil.
39.05 Interest rate risk management
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market interest rates. The companyâs exposure to the risk of changes in market interest rates relates primarily to the companyâs long -term debt obligations with floating interest rates.
The Company has repaid all the bank borrowings including long term loans. Therefore changes in market interest rate does not have any bearing on the companyâs profit before tax.
39.06 Credit risk management
Credit risks refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Companyâs Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables and contract assets, security deposits, etc. None of the financial instruments of the Company result in material concentrations of credit risks. The Company does not engage in speculative treasury activity but seeks to manage risk and optimise interest and commodity pricing through proven financial instruments.
The credit risk on bank balances, bank deposits and investments in mutual funds is limited because the counterparties are banks or fund houses with high credit ratings.
Trade receivables and Contract assets consist of a large number of customers, spread across diverse industries. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Companyâs as part of verification of the customer credentials, ensures the compliance with the following criterion:
⢠Customerâs financial health by examining the latest available financial information.
⢠The rating of the customer by a reputed agency.
⢠Brand and market reputation of the customer.
⢠Ageing analysis.
A default on a financial asset is when the counterparty fails to make contractual payments when they fall due or when the extended credit period expires. This definition of default is determined by considering the business environment in which the Company operates and other macro-economic factors.
Trade receivables and Contract assets are written off or impaired where there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a repayment plan with the Company. Where receivables have been written off or impaired, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised against the same line item.
In determining allowance for credit losses of trade receivables and contract assets, the Company has used the practical expedient by computing the expected credit loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on ageing of receivables and the rates used in provision matrix.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on the credit risk characteristics. The Contract assets relates to retention money receivables and unbilled work in progress having amount due from customer for contract in progress and have substantially the same credit risk characteristics as the trade receivables for the same type of contract. The Company has therefore concluded that the expected credit loss rate for trade receivable are reasonable approximation of the loss rate for the contract assets.
Loss allowance as at March 31, 2025 and March 31,2024 was determined as follows for trade receivables and contract assets under the simplified approach:
The loss allowance for other financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Reconciliation of loss allowance provision of other financial assets (refer note 15). .
39.08 Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital facilities from various banks (including non-fund based facility from Tata Steel Limitedâs One Treasury Service). The Company manages liquidity risk by maintaining adequate reserves, banking facilities, financial support from the promoter and undrawn borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
(i) Borrowings as on March 31,2025 consists liability component of 12.50%, 12.17% and 11.25% Non Convertible Redeemable Preference Shares and liability for amortised interest cost on liability component of 12.50%, 12.17% and 11.25% Non Convertible Redeemable Preference Share. (refer note 46.03)
(ii) Borrowings as on March 31, 2024 consists liability component of 12.50% and 12.17% Non Convertible Redeemable Preference Shares and liability for amortised interest cost on liability component of 12.50% and 12.17% Non Convertible Redeemable Preference Share. Also consists of Optionally Convertible Redeemable Preference Shares reclassified to financial liability (refer note 46.03)
1) The above facility is secured by hypothecation on entire current assets and fixed assets of the Company.
2) The Company has made necessary filings with the Registrar of Companies (ROC) with respect to registration of charges within the statutory timelines.
3) The quarterly returns/statement of current assets filed by the Company during the current year and previous year with the respective banks are in agreement with the books of accounts.
4) For details of carrying amount of assets pledged as security for the working capital facilities sanctioned to the company is mentioned in note 45.
39.10 Fair value measurements
The material accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.09 to 2.11.
Financial assets and liabilities
The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets and financial liabilities that are not measured at fair value on a recurring basis (but fair value disclosure are required):
Fair value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable
and consists of the following three levels:
⢠Level 1 â Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2 â Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
⢠Level 3 â Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The following table summarises the financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not
measured at fair value on a recurring basis (but fair value disclosure are required):
|
As at |
As at |
|
|
March 31,2025 |
March 31,2024 |
|
|
41. Commitments Capital commitment |
Rs. lakhs |
Rs. lakhs |
|
Estimated amount of contracts remaining to be executed on capital account and not provided for 42. Contingent liabilities |
930.58 |
112.49 |
|
(a) Sales tax matters in dispute relating to issues of applicability and classification In respect of the above sales tax matters in dispute, the Company has deposited Rs.149.80 lakhs (March 31,2024: Rs.160.39 lakhs) against various orders, pending disposal of the appeals. This amount is included under note 10 - Other non-current assets. |
545.36 |
247.02 |
|
(b) Excise duty and service tax matters in dispute relating to applicability and classification In respect of the above excise and service tax matters in dispute, the Company has deposited Rs. 60.18 lakhs (March 31,2024: Rs. 60.18 lakhs) against various orders, pending disposal of the appeals. This amount is included under note 10 - Other non-current assets. |
1,668.29 |
1,675.63 |
|
(c) Goods and service tax matters in dispute relating to applicability and classification In respect of the above Goods and service tax matters in dispute, the Company has deposited Rs. 99.33 lakhs (March 31,2024: Rs. 98.65 lakhs) against various orders, pending disposal of the appeals. This amount is included under note 10 - Other non-current assets. |
886.03 |
821.44 |
|
(d) Claims against the Company not acknowledged as debt (primarily of claims made by customers). |
2,697.17 |
2,726.44 |
Future cash outflows in respect of above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities. The Company does not expect any reimbursements in respect of the above contingent liabilities.
Also refer note 46.08 regarding managementâs assessment on certain matters relating to Provident fund.
(b) Revenue recognised during the current year from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of contract modifications) is Nil.
(c) The management expects that 44% of the transaction price amounting to Rs. 2,684.82 lakhs allocated to the unsatisfied contracts as on March 31,2025 will be recognised as revenue during the next reporting period. The remaining 56% will be recognised in the financial year 2026-27.Timing of the recognition of revenue from such long term contracts depends on the progress of the projects which is subject to uncertainty due to various factors and therefore actual results may differ from these estimates.
46.02 Revenue from construction contracts are recognised on percentage completion method. The estimated cost to complete the contracts is arrived at based on technical data, forecast, assumptions and contingencies and are based on the current market price or firm commitments, as applicable. Such estimates/assumptions are subject to variations and completion of the projects within the estimated time. The management has necessary internal control in place around the estimation process and variation is not expected to be significant.
46.03 The Company had issued to Tata Steel Limited (''Tata Steel'') 25,000,000, Optionally Convertible Redeemable Preference Shares (OCRPS) of Rs.10 each, amounting to Rs. 2,500 lakhs in two tranches i.e. (i) Series-1, 11.25% OCRPS aggregating to Rs.1,200 lakhs on May 7, 2022; and (ii) Series-2, 11.25% OCRPS, aggregating to Rs. 1,300 lakhs on May 13, 2022. Pursuant to the terms of the OCRPS and in terms of Regulation 162 of SEBI ICDR Regulations, OCRPS shall be convertible, (in two series), into equity shares at the option of the Company within a period of 18 months from the date of allotment i.e., on or before November 6, 2023 (for series 1) and November 12, 2023 (for series 2). In case, the said option is not exercised within such period, the nature of security will be due for redemption at the end of 18 months.
The Board of Directors has approved issuance of 25,000,000, 11.25% non-cumulative, non-participating, redeemable preference shares of Rs.10 (Rupees ten) each (''NCRPS'') on October 27, 2023, pursuant to sub-section (3) of section 55 of the Companies Act 2013, in lieu of redemption of the existing non-cumulative, optionally-convertible, non-participating, redeemable preference shares (''OCRPS'') of Rs. 10 (Rupees ten) each, amounting to Rs. 2,500 lakhs, subject to the consent of holders of requisite majority of preference shares and the National Company Law Tribunal, (âNCLTâ) and all other approvals from any other appropriate authorities as may be required. Upon issue of such NCRPS, the existing OCRPS held by the preference shareholders shall stand automatically cancelled, extinguished, and rendered redeemed.
Tata Steel Limited being the sole Preference Shareholder has given its consent on October 26, 2023. The Company had filed the application with Hon''ble NCLT, Kolkata Bench, on October 28, 2023, which was allowed by the Hon''ble NCLT vide its Order dated June 26, 2024 (''NCLT Order''). On July 15, 2024, the Board of Directors of the Company, pursuant to NCLT Order and in accordance with sub-section (3) of section 55 of the Companies Act 2013, has approved allotment of NCRPS to Tata Steel Limited, in lieu of redemption of existing OCRPS issued earlier to Tata Steel Limited. As the Company had not converted the OCRPS into equity shares prior to the maturity date, the OCRPS initially classified as an equity instrument has been reclassified to financial liability till their deemed redemption (July 15, 2024) in terms of the said NCLT Order. The Company has allotted fresh NCRPS to Tata Steel Limited, during the quarter ended September 30, 2024.
46.04 On December 11,2023, TRF Singapore Pte Limited (âTRFSâ), a company incorporated in Singapore and a wholly-owned subsidiary of the Company sold its entire stake held in Dutch Lanka Trailer Manufacturers Limited, Sri Lanka (âDLTâ) including its 100% subsidiary Dutch Lanka Engineering (Private) Limited, Sri Lanka (âDLEâ) to United Motors Lanka PLC, Sri Lanka (âUMLâ). Consequent to such sale, DLT and DLE have ceased to be subsidiary of TRFS and the Company from the said date. In view of the above, the Company had evaluated carrying value of investment in TRF Singapore Pte Limited and accordingly, during the previous year, the Company had reversed impairment loss recognised in earlier years to the extent of Rs. 730.23 lakhs and disclosed the same as an exceptional item.
46.05 The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and that has operated throughout the year for all relevant transactions recorded in the software, except that the audit trail is not maintained in case of modification by certain users with specific access and for direct database changes. Further, the audit trail feature has not been tampered with during the year and to the extent maintained in the prior year, has been preserved by the Company as per the statutory requirements for record retention.
46.06 The provisions relating to Corporate Social Responsibility under Section 135 of the Act are not applicable to the Company.
46.07 The Board of Directors of the Company, at its meeting held on September 22, 2022, had approved the scheme of Amalgamation of TRF Limited, into and with its promoter company, Tata Steel Limited as a going concern with the Appointed Date of April 1, 2022, subject to the requisite statutory and regulatory approvals which includes approvals from stock exchanges and NCLT. The company had submitted the scheme of amalgamation to Stock Exchanges on October 11, 2022 and received no objection/no adverse observation from the stock exchanges. The Company had subsequently filed the first motion application with Honâble National Company Law Tribunal (ââNCLTââ), Kolkata Bench on April 4, 2023.
NCLT vide its Order dated September 22, 2023 read with Corrigendum Order dated September 29, 2023 and Order dated November 29, 2023 had directed the Company to convene the equity shareholders meeting on February 8, 2024, or any adjourned dates. However, the Board of Directors of the company has, on February 6, 2024, decided not to proceed with the scheme of amalgamation and approved withdrawal of the Scheme. Thereafter, an application to withdraw the scheme was filed with Honâble National Company Law Tribunal (âNCLTâ), Kolkata Bench, which has been allowed vide Order dated February 7, 2024. Accordingly, there is no accounting impact in current year and previous year.
46.08 The Honâble Supreme Court of India in its judgment in the matter of Vivekananda Vidyamandir & Others Vs The Regional Provident Fund Commissioner (II) West Bengal laid principles in relation to non-exclusion of certain allowances from the definition of âbasic wagesâ for the purposes of determining contribution to provident fund under the Employeesâ Provident Funds & Miscellaneous Provisions Act, 1952. Based on initial assessment performed by the company, the order did not result in any impact on these standalone financial statements. The management will continue to assess the impact of further developments in this regard and deal with it accordingly.
49 The Company has no transactions with the Companies struck off under Companies Act, 2013 or Companies Act,1956.
50 The Company has complied with the number of layers prescribed under the Companies Act, 2013
51 The company has not been declared wilful defaulter by any bank or financial institution or government or government authority.
52 The company has not traded or invested in crypto currency or virtual currency during the current or previous year.
53 There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under Income Tax Act, 1961 that has not been recorded in the books of accounts.
54 The Company has made provisions as at March 31,2025, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. The Company did not have any derivative contracts as at March 31,2025.
55 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
56 No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
57 The Company has not made any investments during the year other than in eleven mutual fund schemes. The Company has not granted loans/ advances in the nature of loans to any Company/Firm/Limited Liability Partnership/Other Party during the year. The Company did not stand guarantee or provided Security to any Company/Firm/Limited Liability Partnership/Other party during the year.
58 No proceeding have been initiated on or are pending against the company for holding of benami property under benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
59 The Company has done an assessment to identify Core Investment Company (CIC) [including CICâs in the Group] as per the necessary guidelines of Reserve Bank of India ( including Core Investment Companies (Reserve Bank) Directions, 2016). The Companies identified as CICâs at Group level are Panatone Finvest Limited, Tata Industries Limited, Tata Sons Private Limited, TMF Holdings Limited, T S Investments and Protraviny Private Limited.
60 Figures for the previous year have been regrouped and reclassified to conform to classification of current year, where ever necessary for better presentation.
61 Approval of financial statements
The financial statements were approved for issue by the Board of Directors on May 2, 2025.
Mar 31, 2024
2.10 Provisions and Contingent liabilities
2.10.01 Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
2.10.02 Warranties
Provisions for the expected cost of warranty obligations under local sale of goods legislation are recognised at the date of sale of the relevant products, at the management''s best estimate of the expenditure required to settle the Company''s warranty obligation.
2.10.03 Onerous contracts
An onerous contract is considered to exist where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract. Present obligation arising under onerous contracts are recognised and measured as provisions.
2.10.04 Contingent liabilities
Contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company, or is a present obligation that arises from past events but is not recognised because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or a reliable estimate of the amount of the obligation cannot be made. Contingent liabilities are disclosed and not recognised. In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Although there can be no assurance regarding the final outcome of the legal proceedings in which the Company is involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.
2.11 Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets (other than Trade Receivable, refer 2.12.10) and financial liabilities are initially measured at fair value. Transactions cost that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transactions cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in the Statement of Profit and Loss.
2.12 Financial assets
All regular purchases or sales of financial assets are recognised and derecognised on a transaction date basis. Regular purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
2.12.01 Financial assets at amortised cost
Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets in order to collect such contractual cash flows are classified in this category. Subsequently, these are measured at amortised cost using the effective interest method less any impairment losses.
2.12.02 Investments in equity instruments at fair value through other comprehensive income (FVTOCI)
On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the âReserve for equity instruments through other comprehensive income''. The cumulative gain or loss is not reclassified to the Statement of Profit and Loss even on disposal of the investments.
The Company has equity investments (refer note 8 to the standalone financial statements), and elected the irrevocable option to carry these at FVTOCI.
2.12.03 Financial assets at fair value through profit and loss (FVTPL)
Investments in equity instruments and units of mutual funds are classified as at FVTPL (except for those carried at FVTOCI, as stated above in note 2.12.02). Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognised in the Statement of Profit and Loss and are included in âOther Incomeâ.
2.12.04 Investment in subsidiaries
Investments in subsidiaries are carried at cost/deemed cost applied on transition to Ind AS, less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of investment is assessed and an impairment provision is recognised, if required immediately to its recoverable amount. On disposal of such investments, difference between the net disposal proceeds and carrying amount is recognised in the Statement of Profit and Loss.
2.12.05 Impairment of financial assets
Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through other comprehensive income.
The Company recognises lifetime expected credit losses (the simplified approach required by Ind AS 109) for all trade receivables that do not contain a financing component. The Company uses the practical expedient by computing the expected credit loss allowance based on a provision matrix, as permitted under Ind AS 109. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information.
For financial assets (apart from trade receivables, as above) whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised. Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk of the financial asset has significantly increased since initial recognition.
2.12.06 Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flow from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of financial asset in its entirety, the difference between the asset''s carrying amounts and the sum of the consideration received and receivable is recognised in the Statement of Profit and Loss.
2.12.07 Foreign exchange gain and losses
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.
For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in the Statement of Profit and Loss.
Changes in the carrying amount of investments in equity instruments at FVTOCI relating to changes in foreign currency rates are recognised in other comprehensive income.
2.12.08 Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income / expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premium or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognised in the statement of profit and loss and is included in the âOther incomeâ line item.
2.12.09 Cash and cash equivalent
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short term deposits with an original maturity of three months or less (if any) which are subject to an insignificant risk of changes in value.
2.12.10 Trade receivables
Trade receivables are amounts due from customers for goods sold or services rendered in the ordinary course of business and reflects company''s unconditional right to consideration. Trade Receivables are recognised initially at transaction price being the amount of consideration that is unconditional unless they contain significant financing components, when they recognised at fair value. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
2.12.11 Contract assets and contract liabilities
For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as âUnbilled Duesâ. For contracts where progress billing exceeds the aggregate of contract costs incurred to date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as âDues to customers under contracts in progressâ. Amounts received before the related work is performed are disclosed in the Balance Sheet as contract liability and termed as âAdvance received from customersâ.
The amounts billed on customer for work performed and are unconditionally due for payment i.e. only passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount of retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset and is reclassified as trade receivables when it becomes due for payment.
The Company recognises impairment loss (termed as provision for expected credit loss on contract assets in the financial statements) on account of credit risk in respect of a contract asset using expected credit loss model on similar basis as applicable to trade receivables.
2.12.12 Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
2.13 Financial liabilities and equity instruments
2.13.01 Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument.
2.13.02 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.
2.13.03 Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
(i) Financial liabilities subsequently measured at amortised cost
All financial liabilities (other than those mention in (ii) below) are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method.
(ii) Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either a derivative instrument (not designated in hedging relationship), contingent consideration recognised by the Company as an acquirer in a business combination to which Ind AS 103 applies, is held for trading, it is designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in Statement of Profit and Loss and are included in âOther income''.
2.13.04 Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in the Statement of Profit and Loss and are included in âOther expenses/Other income''.
For financial liabilities carried at FVTPL, the fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The gain or loss on translation of foreign exchange is recognised in the Statement of Profit and Loss and forms part of the fair value gains or losses.
2.13.05 Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. An exchange between lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the Statement of Profit and Loss.
2.14 Segment reporting
Information reported to the Chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses based on products and services. Accordingly, directors of the Company have chosen to organise the segment based on its product and services as follows:
⢠Products & services
⢠Project & services
The Company''s chief operating decision maker is the Managing Director.
Revenue and expenses directly attributable to segment are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as Unallocable expenses.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as Unallocable.
The company''s financing and income taxes are managed on a company level and are not allocated to operating segment.
2.15 New and amended standards adopted by the Company
The Ministry of Corporate Affairs has vide notification dated March 31,2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 which amends certain accounting standards, and are effective April 01,2023. The Rules predominantly amend Ind AS 12, Income taxes, and Ind AS 1, Presentation of financial statements. The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications. These amendments did not have material impact nor are expected to have a material impact on the company in the current or future reporting periods and on foreseeable future transactions.
03. Summary of other accounting policies
3.01 Dividend and interest income
Dividend income is recognised when the company''s right to receive payment has been established and that the economic benefits will flow to the Company and amount of income can be measured reliably.
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the asset''s net carrying amount on initial recognition.
3.02 Lease As lessee
Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (leases with a lease term of 12 months or less) and leases of low value assets. For short term leases and leases of low value assets, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate, which is determined using the risk free rate for the same tenor adjusted for the credit risk associated with the lease, security etc.
Lease payments included in the measurement of the lease liability comprise fixed lease payments (including insubstance fixed payments) ; and any variable lease payments that are based on a rate, initially measured using the rate at the commencement date. Lease payments to be made under reasonably certain extension options are also included in the measurement of lease liabilities.
Lease payments are allocated between the principal and finance cost. The finance cost is recognized in the Statement of Profit and Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any.
Right-of-use assets are depreciated on straight-line basis over the period of lease term and useful life of the underlying asset whichever is lower. If a lease transfers ownership of the underlying asset or where it is reasonably certain that the Company will exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The Company has used the following practical expedients permitted by the standard.
i) applying single discount rate to a portfolio of leases with reasonably similar character.
ii) accounted for operating leases with remaining lease term of less than 12 months as short term lease.
iii) excluding initial direct cost for the measurement of the right-of-use assets at the date of initial application, and
iv) using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
3.03 Foreign currencies
Transactions in currencies other than entity''s functional currency (foreign currency) are recorded at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies remaining unsettled at the end of each reporting period are remeasured at the rates of exchange prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.
Exchange difference on the re-translation or settlement of monetary items are recognised in the Statement of Profit and Loss in the period in which they arise except for exchange differences on restatement of long-term receivables from non-integral foreign operations that are considered as net investment in such operations in earlier years and carried on transition to Ind AS until disposal of such net investment, in which case the accumulated balance in Foreign exchange fluctuation reserve will be recognised as income / expense in the same period in which the gain or loss on disposal will be recognised.
3.04 Intangible assets
Intangible assets with finite useful lives that are acquired separately are carried at cost/deemed cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is recognised on straight-line basis over the estimated useful lives of assets. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses, if any.
Estimated useful lives of the intangible assets are as follows:
Computer Software : 1 to 10 years
An intangible asset is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of intangible assets is recognised in the Statement of Profit and Loss.
3.05 Borrowing cost
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
3.06 Earning per share
Basic earnings per share is computed by dividing the profit attributable to the ordinary equity holders (i.e., Profit after tax before other comprehensive income) by the weighted average number of shares outstanding during the financial year.
Diluted earnings per share is computed using the weighted average number of share outstanding during the financial year and dilutive potential shares, except where the result would be anti-dilutive.
3.07 Rounding off
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs (upto two decimals) as per the requirements of Schedule III, unless otherwise stated.
Provident Fund
Contributions towards provident funds are recognised as expense for the year. The Company has set up a Provident Fund Trust which is administered by Trustees. Both the employees and the Company make monthly contributions to the Fund at specified percentage of the employeeâs salary and aggregate contributions along with interest thereon are paid to the employees/nominees at retirement, death or cessation of employment.
The Trust invests funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Government under The Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.
The Actuary has carried out actuarial valuation of planâs liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, an amount of Rs. 205.42 lakhs (March 31,2023 : Rs. 204.50 lakhs) has been provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Disclosures given hereunder are restricted to the information available as per the Actuaryâs Report.
38. Employee benefit plans (Contd.)
The company has moved from Superannuation Fund to National Pension Scheme from April 1,2020. The company contributes 10% of basic salary of the eligible employees to NPS. The Company has no further obligation beyond this Contribution. Total amount charged to the Statement of Profit & loss for the year Rs. 113.86 lakhs (March 31,2023: Rs. 104.21 lakhs)
38.02 Defined benefit plans
The Company provides Gratuity benefit to all employees. The Company provides post retirement pension for retired whole-time directors. The assets of the gratuity plans are held separately under the control of the trustees of the independent trusts or with the life insurance companies. The board of trustees of the gratuity fund composed of an equal number of representatives from both employees and employers. The board of the Fund is required by law and by the trust deed to act in the interest of the Fund and of all relevant stakeholders in the scheme. The board of trustee of the fund and management of life insurance company is responsible for the investment policy with regard to the assets of the Fund. Post retirement pension plan is not funded.
Under the gratuity plan, the employees with minimum five years of continuous service are entitled to lumpsum payment at the time of separation calculated based on the last drawn salary and number of years of service rendered with the Company. Under the post retirement pension, the Company pays monthly pension to retired whole-time directors as decided by the board of directors.
The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within this framework, the Companyâs ALM objective is to match assets to the benefit obligations by investing in fixed interest securities with maturities that match the benefit payments as they fall due.
The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The company has not changed the processes used to manage its risk from previous periods. Investments are well diversified such that the failure of any single investment would not have a material impact on the overall level of assets.
These plans expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment risk: The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate
which is determined by reference to market yields at the end of the reporting period on government bonds. Currently, it has relatively balanced mix of investments in government securities and other debt instruments.
Interest risk: A decrease in the bond interest rate will increase the plan liability.
Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of
plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.
As such, an increase in the salary of the plan participants will increase the planâs liability.
Actuarial valuation of the plan assets and the present value of defined benefit obligation were carried out as at March 31,2024 by an independent actuary, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
During the year ended March 31,2024 and March 31,2023 there was no amendment, curtailments and settlements in the gratuity plan and post retirement nension nians.
39. Financial instruments
39.01 Capital management
The Company manages its capital to ensure that entities will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Capital structure of the Company consists of net debt and the total equity of the Company.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, long term liability component of NCRPS, current borrowings and lease liability, less cash and short-term deposits.
39.02 Financial risk management objectives and policies
The Companyâs principal financial liabilities, comprise loans and borrowings and trade and other payables. The Companyâs principal financial assets include trade and other receivables, investments, cash and short-term deposits that derive directly from its operations. The Company is exposed to market risk (including interest rate risk and other price risk), credit risk and liquidity risk.
For instance, the delay in collection of trade receivables may put stress on the short term liquidity which is mitigated by continuous monitoring, churning and liquidating the short term investments and to minimise loss of income from short term investments.
The Company seeks to minimise the effects of these risks by exploring the possibility of investing the surplus funds in the short term portfolios.
The corporate treasury management reports on quarterly basis to the board of directors that monitors risks and policies implemented to mitigate risk exposures.
39.03 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include investment in mutual fund and other investment.
The Companyâs investment in mutual funds are basically in Overnight Funds and Liquid Funds with a shorter duration less than 1 year subject to continuous churning of the investments.
39.04 Foreign currency risk management
The Company enter into sale and purchase transactions; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period were nil.
39.05 Interest rate risk management
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market interest rates. The companyâs exposure to the risk of changes in market interest rates relates primarily to the companyâs long -term debt obligations with floating interest rates.
The Company has repaid all the bank borrowings including long term loans. Therefore changes in market interest rate does not have any bearing on the companyâs profit before tax.
39.06 Credit risk management
Credit risks refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Companyâs Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables, Security deposits, etc. None of the financial instruments of the Company result in material concentrations of credit risks. The Company does not engage in speculative treasury activity but seeks to manage risk and optimise interest and commodity pricing through proven financial instruments.
The credit risk on bank balances is limited because the counterparties are banks with high credit ratings.
Trade receivables and Contract assets consist of a large number of customers, spread across diverse industries. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Companyâs as part of verification of the customer credentials, ensures the compliance with the following criterion:
39. Financial instruments (Contd.)
⢠The rating of the customer by a reputed agency.
⢠Brand and market reputation of the customer.
⢠Ageing analysis.
A default on a financial asset is when the counterparty fails to make contractual payments when they fall due or when the extended credit period expires. This definition of default is determined by considering the business environment in which the Company operates and other macroeconomic factors.
Trade receivables and Contract assets are written off or impaired where there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a repayment plan with the Company. Where receivables have been written off or impaired, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised against the same line item.
In determining allowance for credit losses of trade receivables and contract assets, the Company has used the practical expedient by computing the expected credit loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on ageing of receivables and the rates used in provision matrix.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on the credit risk characteristics. The Contract assets relates to retention money receivables and unbilled work in progress having amount due from customer for contract in progress and have substantially the same credit risk characteristics as the trade receivables for the same type of contract. The Company has therefore concluded that the expected credit loss rate for trade receivable are reasonable approximation of the loss rate for the contract assets.
Loss allowance as at March 31, 2024 and March 31, 2023 was determined as follows for trade receivables and contract assets under the simplified approach:
As at March 31,2024
46. Additional Information to the Financial Statements (Contd.)
46.02 Revenue from construction contracts are recognized on percentage completion method. The estimated cost to complete the contracts is arrived at based on technical data, forecast, assumptions and contingencies and are based on the current market price or firm commitments, as applicable. Such estimates/assumptions are subject to variations and completion of the projects within the estimated time. The management has necessary internal control in place around the estimation process and variation is not expected to be significant.
46.03 The Company had issued to Tata Steel Limited (TSL) 2,50,00,000, Optionally Convertible Redeemable Preference Shares (OCRPS) of Rs.10 each, amounting to Rs. 2,500 lakhs in two tranches i.e. (i) Series-1, 11.25% OCRPS aggregating to Rs.1,200 lakhs on May 7, 2022; and (ii) Series-2, 11.25% OCRPS, aggregating to Rs. 1,300 lakhs on May 13, 2022. Pursuant to the terms of the OCRPS and in terms of Regulation 162 of SEBI ICDR Regulations, OCRPS shall be convertible, (in two series), into equity shares at the option of the Company within a period of 18 months from the date of allotment i.e., on or before November 6, 2023 (for series 1) and November 12, 2023 (for series 2). In case, the said option is not exercised within such period, the nature of security will be due for redemption at the end of 18 months. The Board of Directors has approved issuance of 2,50,00,000, 11.25% non-cumulative, non-participating, redeemable preference shares of Rs. 10 (Rupees ten) each (''NCRPS'') on October 27, 2023, pursuant to sub-section (3) of section 55 of the Companies Act 2013, in lieu of redemption of the existing non-cumulative, optionally-convertible, non-participating, redeemable preference shares (''OCRPS'') of Rs.10 (Rupees ten) each, amounting to Rs. 25,00,00,000 (Rupees twenty five crore), subject to the consent of holders of requisite majority of preference shares and the National Company Law Tribunal, (âNCLTâ) and all other approvals from any other appropriate authorities as may be required. Upon issue of such NCRPS post receipt of the aforesaid approvals, the existing OCRPS held by the preference shareholders shall stand automatically cancelled, extinguished, and rendered redeemed.
Tata Steel Limited being the sole Preference Shareholder has given its consent on October 26, 2023. The Company has filed the application with NCLT on October 28, 2023 which is pending for disposal. As the Company has not converted the OCRPS into equity shares prior to the maturity date, the OCRPS initially classified as an equity instrument has been reclassified to financial liability. Necessary adjustment with respect to issuance of NCRPS in lieu of existing OCRPS will be made upon approval by the NCLT
46.04 (a) TRF Singapore Pte Limited (âTRFSâ), a company incorporated in Singapore and a wholly-owned subsidiary of TRF Limited (âCompanyâ), has executed on October 17, 2023 a Share Purchase Agreement (SPA) to sell its entire stake held in its wholly-owned subsidiary, Dutch Lanka Trailer Manufacturers Limited, Sri Lanka (âDLTâ) including its 100% subsidiary Dutch Lanka Engineering (Private) Limited, Sri Lanka (âDLEâ) to United Motors Lanka PLC, Sri Lanka (''UMLâ).The Board of Directors of the Company at its meeting held on October 17, 2023 noted the above transaction including execution of SPA by TRFS for selling DLT along with DLE, subject to shareholders approval of TRF Limited. The company has obtained approval of the shareholders of TRF Limited through postal ballot by remote e-voting process concluded on November 29,2023 .
During the quarter ended December 31, 2023, DLT distributed dividend to TRFS amounting to ~ Rs. 2,738 lakhs (LKR 1100 Mn), subject to dividend distribution tax of ~ Rs. 205 lakhs (LKR 82.5 Mn). On December 11, 2023, TRFS has sold its entire stake held in DLT (including its 100% subsidiary DLE) to United Motors Lanka PLC, Sri Lanka (âUMLâ), at a fixed consideration of ~ Rs. 1,745 lakhs (LKR 700 Mn). Consequent to such sale, DLT and DLE have ceased to be subsidiary of TRFS and the Company from the said date.
(b) In view of the above, the Company has evaluated carrying value of investment in TRF Singapore Pte Limited and accordingly, the company has reversed impairment loss recognized in earlier years to the extent of Rs. 730.23 lakhs. The aforesaid item has been disclosed as an exceptional item.
46.05 The Proper books of accounts as required by law have been kept by the company including that back-up of the books of accounts and other books and papers maintained in electronic mode on servers physically located in India on daily basis except for the following(i) during the period up to May 21,2023, the back-up has been maintained on every working day between Monday to Friday. Working day means a day which is not a declared holiday as per the list of holidays declared by the management of the Company, and (ii) on May 26, 2023, June 02, 2023, June 09 to June 11,2023, June 16, 2023, February 16, 2024, February 18 to 21,2024, February 25, 2024, March 03, 2024 and March 31,2024 due to software upgradation and technical issues.
46.06 The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and that has operated throughout the year for all relevant transactions recorded in the software, except that the audit trail is not maintained in case of modification by users with specific access and for any direct database changes.
46.07 The provisions relating to Corporate Social Responsibility under Section 135 of the Act are not applicable to the Company.
46.08 The Board of Directors of the Company, at its meeting held on September 22, 2022, had approved the scheme of Amalgamation of TRF Limited, into and with its promoter company, Tata Steel Limited as a going concern with the Appointed Date of April 1, 2022, subject to the requisite statutory and regulatory approvals which includes approvals from stock exchanges and NCLT. The company had submitted the scheme of amalgamation to Stock Exchanges on October 11, 2022 and received no objection/no adverse observation from the stock exchanges. The Company had subsequently filed the first motion application with Honâble National Company Law Tribunal (âNCLTâ), Kolkata Bench on April 4, 2023.
NCLT vide its Order dated September 22, 2023 read with Corrigendum Order dated September 29, 2023 and Order dated November 29, 2023 had directed the Company to convene the equity shareholders meeting on February 8, 2024, or any adjourned dates. However, the Board of Directors of the company has, on February 6, 2024, decided not to proceed with the scheme of amalgamation and approved withdrawal of the Scheme. Thereafter, an application to withdraw the scheme was filed with Honâble National Company Law Tribunal (âNCLTâ), Kolkata Bench, which has been allowed vide Order dated February 7, 2024. Accordingly, there is no accounting impact in current year and previous year.
50. The Company has complied with the number of layers prescribed under the Companies Act, 2013
51. The company has not been declared wilful defaulter by any bank or financial institution or government or government authority.
52. The company has not traded or invested in crypto currency or virtual currency during the current or previous year.
53. There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under Income Tax Act, 1961 that has not been recorded in the books of accounts.
54. The Company has made provisions as at March 31,2024, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. The Company did not have long term derivative contracts as at March 31,2024.
55. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
56. No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
57. The Company has not made any investments during the year other than in twelve mutual fund schemes. The Company has not granted loans/ advances in the nature of loans to any Company/Firm/Limited Liability Partnership/Other Party during the year. The Company did not stand guarantee or provided Security to any Company/Firm/Limited Liability Partnership/Other party during the year.
58. No proceeding have been initiated on or are pending against the company for holding of benami property under benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
59. The Company has done an assessment to identify Core Investment Company (CIC) [including CICâs in the Group] as per the necessary guidelines of Reserve Bank of India (including Core Investment Companies (Reserve Bank) Directions, 2016). The Companies identified as CICâs at Group level are Panatone Finvest Limited, TATA Capital Limited, TATA Industries Limited, TATA Sons Private Limited, TMF Holdings Limited, T S Investments and Talace Private Limited.
60. Figures for the previous periods have been regrouped and reclassified to conform to classification of current period, where ever necessary for better presentation.
61. Approval of financial statements
The financial statements were approved for issue by the Board of Directors on May 15, 2024.
In terms of our report of even date
For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of the Board of Directors
Firm Registration No. : 304026E / E-300009
Sd/- Sd/-
Avneesh Gupta Umesh Kumar Singh
Chairman Managing Director
DIN:07581149 DIN:08708676
Sd/- Sd/- Sd/-
Charan S. Gupta Anand Chand Prasun Banerjee
Partner Chief Financial Officer Company Secretary
Membership no. : 093044 FCA:056983 ACS:29791
Gurugram, May 15, 2024 Jamshedpur, May 15, 2024
Mar 31, 2023
Notes (Right-of-use assets and Lease liabilities) :
i. On adoption of Ind AS 116, the Company has recognised right-of-use assets and lease liabilities in relation to leases which was previously recognised as âoperating leasesâ under the principles of Ind AS 17, Leases. The right-of-use assets and lease liabilities were measured at the present value of the remaining lease payments, discounted using the lesseeâs incremental borrowing rate applied to the lease liabilities as on April 01,2019.
ii. Rs. 97.16 lakhs (March 31,2022: Rs. 70.35 lakhs) is towards lease of land/ premises/facilities, etc and are secured by the rights to the leased assets recognised in the financial statements as Right-of-Use Assets. The discount rate is between the range of 11.50% to 12.50% pa.
1. The cost of inventories recognised as an expense during the year in respect of write downs of inventory to its net realisable value was Rs. 2.75 lakhs (March 31,2022: Rs 24.31 lakhs).
2. The mode of valuation of inventories has been stated in note 2.14.
3. For details of carrying amount of inventories pledged as security for working capital facilities sanctioned refer note 45.
1. For details of carrying amount of trade receivables pledged as security for working capital facilities sanctioned to the company. (refer note 45)
2. The credit period given to customers range from 0 to 30 days. No interest is charged on the overdue amounts.
3. The amount expected to be recovered/settled more than 12 months after the Balance sheet date is Rs. 3,786.67 lakhs (March 31, 2022 : Rs. 10,035.33 lakhs)
4. Also refer note 39.06
Rights, preferences and restrictions attached to shares Equity shares
The Company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is entitled for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.
Rights, preferences and restrictions attached to shares Preference Shares
The Company has one class of 12.5% Non-Convertible Redeemable Preference Share(âNCRPS'') having a par value of Rs.10 per share. Each Preference shareholder is eligible for one vote per share as per the terms of Section 47(2) of the Companies Act, 2013 and dividend as and when declared by the Company. As per terms of Preference shares, NCRPS issued for a period not exceeding 20 years from the date of allotment shall be redeemable at par upon the maturity or redeemed early at the option of the Company in full or in part at 3 monthly intervals from the date of allotment. In the event of winding up of Company, NCRPS shall be non- participating in surplus assets and profit which may remain after the entire capital has been repaid, on winding up of the Company.
16 (b) Preference share capital (Contd.)
The Company has one class of 12.17% Non-Convertible Redeemable Preference Share(âNCRPSâ) having a par value of Rs.10 per share. NCRPS carry a dividend @1%p.a for first three years and 18.3%p.a. thereafter for the remaining term (effective yield 12.17%). Each Preference shareholder is eligible for one vote per share as per the terms of Section 47(2) of the Companies Act, 2013 and dividend as and when declared by the Company. As per terms of Preference shares,NCRPS issued for a period not exceeding 15 years from the date of allotment and shall be redeemable at par upon maturity or optional early redemption with accrued interest thereon computed on the basis of the effective yield of the instrument, at the option of the Company on a quarterly basis at 3-month intervals from the date of allotment. In the event of winding up of Company,NCRPS shall be non- participating in surplus assets and profit which may remain after the entire capital has been repaid, on winding up of the Company.
Rights, preferences and restrictions attached to shares
The Company has 11.25% Optionally Convertible Redeemable Preference Share(âOCRPSâ) having a par value of Rs.10 per share. Each Preference shareholder is eligible for one vote per share as per the terms of Section 47(2) of the Companies Act, 2013 and dividend as and when declared by the Company. As per terms of Preference shares,OCRPS shall be convertible, (in two series), into equity shares at the option of the Company within a period of 18 months from the date of allotment or shall be redeemable at par upon maturity at the end of 18 months or redeemed early at the option of the Company at 3 monthly intervals from the date of allotment. In the event of winding up of Company,OCRPS shall be non- participating in surplus assets and profit which may remain after the entire capital has been repaid, on winding up of the Company.
Nature and Purpose:
The company has issued 11.25 % Optionally Convertible Redeemable Preference Shares (âOCRPSâ) of Rs.1,200 lakhs on May 7, 2022 and Rs.1,300 lakhs on May 13,2022 aggregating to Rs. 2,500 lakhs, divided in to 2,50,00,000 preference shares of Rs. 10 each to Tata Steel Limited, on private placement basis.
The proceeds of the issue will be primarily utilized inter-alia, for repayment of the existing indebtedness of the Company, payment against long-outstanding vendor dues, for completing legacy projects and delivering other committed orders and/or for other general corporate purposes.
(a) Equity Component of 12.5% Non Convertible Redeemable Preference Shares:
The company has issued 12.5% Non Convertible Redeemable Preference Shares (âNCRPSâ) of Rs. 25,000 lakhs, divided in to 25,00,00,000 preference shares of Rs.10 each to Tata Steel Limited, on private placement basis on March 25, 2019. NCRPS are in nature of compound financial instrument, accordingly the liability portion disclosed under long term borrowings and residual portion is disclosed under other equity.
The proceeds of the issue to be primarily utilized towards repayment of the whole or a part of the existing indebtedness of the Company and/ or for general corporate purposes.
(b) Equity Component of 12.17% Non Convertible Redeemable Preference Shares:
The company has issued 12.17% Non Convertible Redeemable Preference Shares (âNCRPSâ) of Rs.16,500 lakhs on June 8, 2022 and Rs.7,400 lakhs on March 1,2023 aggregating to Rs 23,900 lakhs, divided in to 23,90,00,000 preference shares of Rs 10 each to Tata Steel Limited, on private placement basis. NCRPS are in nature of compound financial instrument, accordingly the liability portion disclosed under long term borrowings and residual portion is disclosed under other equity .
The proceeds of the issue to be primarily utilized inter-alia, for repayment of the existing indebtedness of the Company, payment against long-outstanding vendor dues, for completing legacy projects and delivering other committed orders and/or for other general corporate purposes.
(c) General reserve :
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
(d) FVOCI-Equity Investment :
This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through OCI, net of amounts reclassified to the retained earnings when those assets have been disposed off.
(e) Foreign exchange fluctuation reserve :
The exchange differences on restatement of long-term receivables from non-integral foreign operations that are considered as net investment in such operations in earlier years and carried on transition to Ind AS until disposal of such net investment, in which case the accumulated balance in Foreign exchange fluctuation reserve will be recognised as income / expense in the same period in which the gain or loss on disposal will be recognised.
Note: The borrowings obtained by the Company from banks have been applied for the purposes for which such loans were taken.
The Company availed Inter-Corporate Deposit (ICD) during the year ended March 2022, for an amount upto ''100 Crore (Rupees One Hundred Crore only) at an interest rate of 9.92% per annum which is at armâs length, for a tenure of 12 months in the ordinary course of business from Tata Steel Limited (TSL). The same has been fully repaid along with interest during the year ended March 2023.
35. Income tax
The Company during the year ended March 31, 2023 has opted for the new tax regime under Section 115BAA of the Act, which provides a domestic Company with an option to pay tax @ 22% ( effective rate of 25.168%). The lower rate shall be applicable subject to certain conditions, including that the total income should be computed without claiming specific deductions and exemptions. Section 115BAA also provides that the provisions of section 115JB of the Act (MAT) shall not apply to a company opting for such reduced rate.
36. Segment information
36.01 Products and services from which reportable segment derives their revenues
Information reported to the Chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses based on products and services. Accordingly, directors of the Company have chosen to organise the segment based on its product and services as follows:
⢠Products & services
⢠Projects & services
The Companyâs chief operating decision maker is the Managing Director.
Revenue and expenses directly attributable to segment are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as Unallocable expenses.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as Unallocable.
The companyâs financing and income taxes are managed on a company level and are not allocated to operating segment.
Segment profit represents the profit and loss before tax earned by each segment without allocation of corporate costs, other income, exceptional item as well as interest costs. This is the measure reported to the executive management committee for the purposes of resource allocation and assessment of segment performance.
In the Companyâs operations within India there is no significant difference in the economic conditions prevailing in the various states of India. Revenue from sales to customers outside India is nil in the current and previous year. Hence disclosures on geographical segment are not applicable.
36.06 Information about major customers
Included in revenue arising from direct sales of goods and services of Rs. 17,710.24 lakhs (March 31,2022: Rs. 12,713.76 lakhs) are revenues of approximately Rs.13,599.31 lakhs (March 31,2022: Rs 10,024.31 lakhs) pertaining to sales to the companyâs top two customers. No other single customer contributed 10% or more of the Companyâs revenue in year ended March 31,2023 and March 31,2022
38.01 Defined contribution plans
The Company provide Provident Fund facility to all employees. The Company provides superannuation benefits to selected employees. The assets of the plans are held separately from those of the Company in funds under the control of the trustees in case of trust or of the employees provident fund organisation. The contributions are expensed as they are incurred in line with the treatment of wages and salaries. The Companyâs Provident Fund is exempted under section 17 of Employeesâ Provident Fund and Miscellaneous Provision Act, 1952. Conditions for exemption stipulate that the Company shall make good deficiency, if any, in the interest rate declared by the trust vis-a-vis interest rate declared by the Employeesâ Provident Fund Organisation. The liability as on the balance sheet date is ascertained by an independent actuarial valuation.
Provident Fund
Contributions towards provident funds are recognised as expense for the year. The Company has set up a Provident Fund Trust which is administered by Trustees. Both the employees and the Company make monthly contributions to the Fund at specified percentage of the employeeâs salary and aggregate contributions along with interest thereon are paid to the employees/nominees at retirement, death or cessation of employment.
The Trust invests funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Government under The Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.
The Actuary has carried out actuarial valuation of planâs liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, an amount of Rs.204.50 lakhs (March 31,2022 : Rs. 74.40 lakhs) has been provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Disclosures given hereunder are restricted to the information available as per the Actuaryâs Report.
National Pension Scheme & Superannuation Fund
The Company has a superannuation plan. Separate irrevocable trusts are maintained for employees covered and entitled to benefits. The company contributes 15% of basic salary of the eligible employees to the trust every year. Such contributions are recognized as an expense when incurred. The company has no further obligation beyond this contribution. Total amount charged to the Statement of Profit and Loss for the year Rs. 6.42 lakhs (Previous year Rs 7.76 lakhs).
The Company has moved from Superannuation Fund to National Pension Scheme from April 1, 2020. The Company contributes 10% of basic salary of the eligible employees to NPS. The Company has no further obligation beyond this Contribution. Total amount charged to the Statement of Profit & loss for the year Rs. 104.21 lakhs (Previous year Rs. 92.85 lakhs)
38.02 Defined benefit plans
The Company provides Gratuity benefit to all employees. The Company provides post retirement pension for retired whole-time directors. The assets of the gratuity plans are held separately from those of the Company in funds under the control of the trustees of the independent trusts or with the life insurance companies. The board of trustees of the gratuity fund composed of an equal number of representatives from both employees and employers. The board of the Fund is required by law and by the trust deed to act in the interest of the Fund and of all relevant stakeholders in the scheme. The board of trustee of the fund and management of life insurance company is responsible for the investment policy with regard to the assets of the Fund. Post retirement pension plan is not funded.
Under the gratuity plan, the employees with minimum five years of continuous service are entitled to lumpsum payment at the time of separation calculated based on the last drawn salary and number of years of service rendered with the Company. Under the post retirement pension, the Company pays monthly pension to retired whole-time directors as decided by the board of directors.
These plans expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment Risk: The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate
which is determined by reference to market yields at the end of the reporting period on government bonds. Currently, for the plan in India, it has relatively balanced mix of investments in government securities and other debt instruments.
Interest risk: A decrease in the bond interest rate will increase the plan liability.
Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of
plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.
As such, an increase in the salary of the plan participants will increase the plan''s liability.
In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of defined benefit obligation were carried out as at March 31,2023 by an independent actuary, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
The fair value of the above equity and securities issued by government are determined based on quoted market prices in active markets. The fair value of other debt instruments are also determined based on quoted price in active market. The fair value of balance in special deposit scheme is determined based on its carrying value. The fair value of balance with Life Insurance Corporation is determined based on the funds statement received from the Company.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase, attrition and mortality. The sensitivity analysis given below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
⢠If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs.103.22 lakhs (increase by Rs. 120.45 lakhs) [March 31,2022: decrease by Rs. 99.26 lakhs (increase by Rs. 116.10 lakhs)]
⢠If the expected salary increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 118.51 lakhs (decrease by Rs. 103.56 lakhs) [March 31,2022: increase by Rs. 113.59 lakhs (decrease by Rs. 99.11 lakhs)]
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected pension increase and mortality. The sensitivity analysis given below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
⢠If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs. 69.40 lakhs (increase by Rs. 78.31 lakhs) [March 31,2022: decrease by Rs. 78.76 lakhs (increase by Rs. 89.39 lakhs)]
⢠If the expected pension increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 76.15 lakhs (decrease by Rs. 68.59 lakhs) [March 31,2022: increase by Rs. 86.81 lakhs (decrease by Rs. 77.77 lakhs)]
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
Leave Obligation
The Leave scheme is a salary Defined Benefit Plan that provides for a lump sum payment made on exit or encashable either by way of retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of final salary and the accumulated leave balances and paid as lump sum at exit.
This benefit includes Cash equivalent of Unutilized leave balances at the time of exit subject to Annual entitlement & ceiling of maximum encashable leave accumulation. The Company records a provision for leave obligation Rs. 515.17 lakhs (Previous year Rs. 525.04 lakhs)
Others
Others Consist of Company and Employee contribution to :
i) Employee State Insurance [Total Amount charged to the Statement of Profit & Loss for the year Rs. 12.53 lakhs (Previous year 2021-22 Rs. 8.45 lakhs)]
39. Financial instruments
39.01 Capital management
The Company manages its capital to ensure that entities will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Capital structure of the Company consists of net debt and the total equity of the Company.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, long-term borrowings, short-term borrowings and lease liability, less cash and short-term deposits.
The Net debt to equity ratio for the current year improved as a result of issuance of Non Convertible Redeemable Preference Shares and Optionally Convertible Redeemable Preference Shares amounting to Rs. 23,900 lakhs and Rs. 2,500 lakhs respectively and repayment of all bank borrowings.
39.02 Financial risk management objectives and policies
The Companyâs principal financial liabilities, other than derivatives, comprise loans and borrowings and trade and other payables. The Companyâs principal financial assets include trade and other receivables, investments, cash and short-term deposits that derive directly from its operations. The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Companyâs policies approved by the board of directors, which provide written principles on foreign exchange risks,
interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments. The Company does not enter into or trade financial instruments including derivative financial instruments, for speculative purposes.
The corporate treasury management reports on quarterly basis to the board of directors that monitors risks and policies implemented to mitigate risk exposures.
39.03 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include investment in mutual fund and other investment.
The Companyâs investment in mutual funds are basically in Overnight Funds and Liquid Funds with a shorter duration ranging between 1 day and 90 days subject to continuous churning of the investments.
Foreign currency sensitivity analysis
The following table details the Companyâs sensitivity to a 10% increase and decrease in exchange rate between the pairs of currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for 10% change in foreign currency rates. The sensitivity analysis includes trade payables, receivables, advance to suppliers and advance from customers where the denomination of the monetary item is in a currency other than the functional currency of the entity (i.e. INR). The sensitivity analysis has been undertaken on net unhedged exposure in foreign currency.
39.05 Interest rate risk management
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market interest rates. The companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long -term debt obligations with floating interest rates.
The Company has repaid all the bank borrowings including long term loans. Therefore changes in market interest rate does not have any bearing on the Companyâs profit before tax.
The risk estimates provided assume a parallel shift of 50 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the period.
39.06 Credit risk management
Credit risks refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Companyâs Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables and loans and advances. None of the financial instruments of the Company result in material concentrations of credit risks. The Company does not engage in speculative treasury activity but seeks to manage risk and optimise interest and commodity pricing through proven financial instruments.
The credit risk on bank balances is limited because the counterparties are banks with high credit ratings.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Companyâs as part of verification of the customer credentials, ensures the compliance with the following criterion:
⢠Customerâs financial health by examine the audited financial statements.
⢠The rating of the customer by a reputed agency.
⢠Brand and market reputation of the customer.
⢠Ageing analysis
A default on a financial asset is when the counterparty fails to make contractual payments when they fall due or when the extended credit period expires. This definition of default is determined by considering the business environment in which the Company operates and other macroeconomic factors.
Trade receivables are written off or impaired where there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a repayment plan with the Company. Where receivables have been written off or impaired, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised against the same line item.
In determining allowance for credit losses of trade receivables, the Company has used the practical expedient by computing the expected credit loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on ageing of receivables and the rates used in provision matrix.
The loss allowance for other financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Reconciliation of loss allowance provision of other financial assets - refer note 14
39.08 Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital loan from various banks, obtained inter-corporate deposit from Tata Steel Limited and issued 12.17% Non Convertible Redeemable Preference Shares and 11.25% Optionally Convertible Redeemable Preference Shares to Tata Steel Limited. The Company manages liquidity risk by maintaining adequate reserves, banking facilities, financial support from the promoter and undrawn borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Liquidity and interest risk tabless
The following tables detail the maturity profile of Companyâs non-derivative financial liabilities with agreed repayment period. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.
Borrowings as on March 31,2023 consists liability component of 12.5% and 12.17% Non Convertible Redeemable Preference Shares and liability for amortised interest cost on liability component of 12.5% and 12.17% Non Convertible Redeemable Preference Shares.
However, borrowings as on March 31,2022 include following :
i) Five term loans aggregating to Rs.4,656 lakhs. Out of which Rs. 1,158 lakhs has been disbursed by IDBI Bank, Rs. 700 lakhs has been disbursed by HDFC Bank, Rs.899 lakhs has been disbursed by CBI Bank, Rs.1499 lakhs has been disbursed by Canara bank and Rs.450 lakhs by Indian Bank respectively under Guaranteed Emergency Credit Line -2 for a period of 5 years and with a moratorium of 1 year in terms of repayment of principal. Post moratorium period, the outstanding principal amount is to be paid in 48 monthly instalments. Interest to be serviced as and when applied.
One term loans aggregating to Rs.869 lakhs disbursed by Indian Bank under Guaranteed Emergency Credit Line -2 for a period of 6 years and with a moratorium of 2 year in terms of repayment of principal. Post moratorium period, the outstanding principal amount is to be paid in 48 monthly instalments. Interest to be serviced as and when applied.
Two terms loans aggregating to Rs.1050 lakhs. Out of which Rs.550 lakhs has been disbursed by Bank of Baroda on 31st July, 2020 and Rs. 500 lakhs by Central Bank of India on 26th June, 2020 under first trench of Covid Assistance/Sahayata Scheme. Both the loans have a tenure of 2 years with a moratorium of 6 months in repayment of principal which is to be repaid in 18 instalments. Interest to be serviced as and when applied.
All the above Bank borrowings are repaid by the company during the current year.
(ii) Liability component of 12.5% Non Convertible Redeemable Preference Shares and liability for amortised interest cost over the same.
39.09 Financing facilities
The following table details the Companyâs borrowing facilities that are available for future operating activities :
39.10 Fair value measurements
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.16 to 2.18.
Fair value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable
and consists of the following three levels:
⢠Level 1 â Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2 â Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
⢠Level 3 â Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
|
As at |
As at |
|
|
March 31,2023 |
March 31,2022 |
|
|
42. Contingent liabilities |
Rs. lakhs |
Rs. lakhs |
|
(a) Sales tax matters in dispute relating to issues of applicability and classification In respect of the above sales tax matters in dispute, the Company has deposited Rs.173.29 lakhs (March 31, 2022: Rs.181.06 lakhs) against various orders, pending disposal of the appeals. This amount is included under Note 9 - Other non-current assets. |
738.25 |
2,189.94 |
|
(b) Excise duty and service tax matters in dispute relating to applicability and classification In respect of the above excise and service tax matters in dispute, the Company has deposited Rs.157.89 lakhs (March 31,2022: Rs.157.89 lakhs) against various orders, pending disposal of the appeals. This amount is included under Note 9 - Other non-current assets. |
5,504.52 |
3,982.31 |
|
(c) Goods and service tax matters in dispute relating to applicability and classification In respect of the above Goods and service tax matters in dispute, the Company has deposited Rs.8.15 lakhs (March 31, 2022: 8.15 lakhs) against various orders, pending disposal of the appeals. This amount is included under Note 9 - Other non-current assets. |
95.33 |
89.69 |
|
(d) Income tax matters in dispute |
- |
3,241.24 |
|
(e) Claims against the Company not acknowledged as debt (primarily of claims made by customers). |
3,583.41 |
3,236.83 |
|
(f) Others |
33.42 |
33.42 |
|
Future cash outflows in respect of above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities. Also refer note 46.10 regarding managementâs assessment on certain matters relating to Provident fund. |
||
The above information have been disclosed to the extent such suppliers could be identified by the management on the basis of information
available with the Company and the same has been relied upon by the auditors.
46.02 The Company has accumulated losses as on March 31, 2023 amounting to Rs. 58,964.46 lakhs and has earned Profit after tax of Rs. 8,775.87 lakhs during the year ended March 31,2023 as against loss after tax of Rs. 2,034.95 lakhs in the previous year ended March 31,2022.
The Company has generated sufficient cash flow during the year, mainly on account of improved operations, resulting from new business and necessary financial support from the promoter, increased efficiencies from project activities, etc. The Promoter have infused Rs. 2,500 lakhs through 11.25% Optionally Convertible Redeemable Preference Shares in May 2022, and Rs. 16,500 lakhs & Rs. 7,400 lakhs through 12.17% Non-Convertible Redeemable Preference Shares in June 2022 and March 2023 respectively. The Company expects to generate positive cash flows from increased continuing business from promoter and has access to additional funding of Rs. 10,000 lakhs through Inter Corporate Deposit from the promoter which has been approved by the Board at their Meeting held on February 9, 2023 and subsequently by the Shareholders on March 30, 2023. Further, the Company also expects cash flow from the proceeds of restructuring of its subsidiaries, which will be sufficient to meet any future obligations of the Company. Accordingly, these financial statements have been prepared on a going concern basis.
46.03 Revenue from construction contracts are recognized on percentage completion method. The estimated cost to complete the contracts is arrived at based on technical data, forecast, assumptions and contingencies and are based on the current market price or firm commitments, as applicable. Such estimates/assumptions are subject to variations and completion of the projects within the estimated time. The management has necessary internal control in place around the estimation process and variation is not expected to be significant.
46.04 The Company had submitted an application to RBI in 2013 for capitalisation of corporate guarantee fee and interest on loan receivable from TRF Singapore Pte. Ltd. The same was approved by RBI vide letter dated September 11, 2018 subject to compounding for noncompliance with the relevant Regulation. Further, in the said letter, RBI also directed the Company to unwind its FDI in the joint venture through its foreign step-down subsidiary within a specific time period and apply for compounding for both the above stated matters. During the quarter ended December 31,2020, the Group divested its entire stake in the said joint venture and communicated the same to RBI. Subsequently, on September 3, 2021 RBI issued a Memorandum of Compounding (MoC) in respect of contraventions pertaining to earlier years including a number of procedural matters. The Company submitted its compounding application on October 29, 2021 to the RBI. RBI vide letter dated November 10, 2021 returned the application filed, directing the Company to file separate compounding applications for each overseas entity. The Company vide letter dated November 22, 2021, filed separate compounding applications for each overseas entity. Based on such Compounding application, RBI vide order dated May 27, 2022 and June 29, 2022 compounded all the contraventions and directed the Company for payment of sum towards compounding. The Company appropriately paid the amount and accordingly the applications are disposed.
46.05 The Company has recognized an impairment charge of Rs. 489.20 lakhs during the year ended March 31,2022 in the carrying value of investments in its subsidiary. The aforesaid items has been disclosed as exceptional item.
46.06 The Company had reached an agreement with the Union for the wage revision on July 23, 2021 for the graded employees which was pending since 2015. The impact of the wage revision has been accounted for in the financial statements during the year ended March 31,2022 (refer note 31).
46.07 The proper books of accounts as required by law have been kept by the Company including that back-up of the books of account and other books and papers maintained in electronic mode on servers physically located in India, however the back-up is maintained on every working day between Monday to Friday. Working day means a day which is not declared a holiday as per the list of holidays declared by the management of the Company.
46.08 The provisions relating to Corporate Social Responsibility under Section 135 of the Act are not applicable to the Company.
46 .09 The Board of Directors of the Company, at its meeting held on September 22, 2022, had approved the scheme of Amalgamation of TRF
Limited, into and with its promoter company, Tata Steel Limited as a going concern with the Appointed Date of April 1, 2022, subject to the requisite statutory and regulatory approvals which includes approvals from stock exchanges and NCLT. The Board of Directors has recommended a share exchange ratio of 17 fully paid equity shares of Re.1/- each of Tata Steel Limited for every 10 fully paid equity shares of Rs.10/- each of the Company. Upon implementation of the scheme, the equity shareholders of the Company would be entitled to fully paid shares of Tata Steel Limited in the ratio as set out in the scheme. The Company had submitted the scheme of amalgamation to Stock Exchanges on October 11,2022 and received no objection/no adverse objection from National Stock Exchange of India Limited and BSE Limited respectively vide letter dated March 31,2023. The Company has subsequently filed the Scheme with Honâble National Company Law tribunal (âNCLTâ), Kolkata Bench on April 04, 2023 for approval.
46.10 The Honâble Supreme Court of India in its judgment in the matter of Vivekananda Vidyamandir & Others Vs The Regional Provident Fund Commissioner (II) West Bengal laid principles in relation to non-exclusion of certain allowances from the definition of âbasic wagesâ for the purposes of determining contribution to provident fund under the Employeesâ Provident Funds & Miscellaneous Provisions Act, 1952. Based on initial assessment performed by the Company, the order did not result in any impact on these standalone financial statements. The management will continue to assess the impact of further developments in this regard and deal with it accordingly.
50 The Company has complied with the number of layers prescribed under the Companies Act, 2013
51 The Company has not been declared wilful defaulter by any bank or financial institution or government or government authority.
52 The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
53 There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under Income Tax Act, 1961 that has not been recorded in the books of accounts.
54 The Company has made provisions as at March 31,2023, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. The Company did not have long term derivative contracts as at March 31,2023.
55 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
56 No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
57 The Company has not made any investments during the year other than in fifteen mutual fund schemes. The Company has not granted loans/ advances in the nature of loans to any Company/Firm/Limited Liability Partnership/Other Party during the year. The Company did not stand guarantee or provided Security to any Company/Firm/Limited Liability Partnership/Other party during the year.
58 No proceeding have been initiated on or are pending against the Company for holding of benami property under Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
59 The Company has done an assessment to identify Core Investment Company (CIC) [ including CICâs in the Group ] as per the necessary guidelines of Reserve Bank of India ( including Core Investment Companies (Reserve Bank) Directions, 2016). The Companies identified as CICâs at Group level are Panatone Finvest Limited , TATA Capital Limited, TATA Industries Limited , TATA Sons Private Limited ,TMF Holdings Limited, T S Investments and Talace Private Limited.
60 The Company has entered into a scheme of arrangements which is pending approval as explained in note 46.09. Accordingly, there is no accounting impact in current year and previous year.
61 Approval of financial statements
The financial statements were approved for issue by the Board of Directors on May 05, 2023.
Mar 31, 2019
1. General corporate information
TRF Limited, (âthe Companyâ) incorporated in 1962 has its Registered Office at 11 Station Road, Burma Mines, Jamshedpur 831007. The Company is listed on the National Stock Exchange of India Limited, BSE Limited and The Calcutta Stock Exchange Limited. The Company undertakes turnkey projects of material handling for the infrastructure sector such as power and ports and industrial sector such as steel plants, cement, fertilisers and mining. The Company is also engaged in production of such material handling equipments at its manufacturing plant at Jamshedpur.
The financial statements are presented in Indian Rupee (INR) which is also Functional Currency of the Company.
Note :
1. The cost of inventories recognised as an expense during the year in respect of write downs of inventory to its net realisable value was Rs 210.76 lakhs (for the year ended March 31, 2018 : Rs 116.13 lakhs).
2. The mode of valuation of inventories has been stated in note 2.13.
3. For details of carrying amount of inventories pledged as security for secured borrowings refer Note 19.
Rights, preferences and restrictions attached to shares Equity shares
The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is entitled for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.
Preference Shares
The Company has one class of 12.5% Non-Convertible Redeemable Preference Shares (âNCRPSâ) having a par value of Rs.10 per share. Each preference shareholder is eligible for one vote per share as per terms of Section 47(2) of the Companies Act 2013 and dividend as and when declared by the Company. As per the terms of preference shares, NCRPS shall be redeemable at par upon maturity or redeemed early at the option of the Company in full or in part at 3 monthly intervals from the date of allotment. In the event of winding up of Company, NCRPS shall be non-participating in surplus assets and profits which may remain after the entire capital has been repaid, on winding up of the Company.
(b) Reserve for equity instrument through other comprehensive income (OCI) : This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through OCI, net of amounts reclassified to the retained earnings when those assets have been disposed off.
(c) Foreign exchange fluctuation reserve : Foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit and loss on repayment of the monetary items or disposal of investment.
(d) Foreign currency monetary item translation difference reserve : Exchange differences arising on settlement and remeasurement of long-term foreign currency monetary items are accumulated in âForeign Currency Monetary Item Translation Difference Accountâ and amortised over the maturity period or upto the date of settlement of such monetary items, whichever is earlier, and charged to the Statement of profit and loss.
(e) Equity component of 12.5% Non Convertible Redeemable Preference Shares : This reserve represents Equity portion of 12.5% Non cummulative redeemable preference shares. (refer Note 44.04)
2. Segment information
2.01 Products and services from which reportable segment derives their revenues
Information reported to the Chief Operating Decision Maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses based on products and services. Accordingly, directors of the Company have chosen to organise the segment based on its product and services as follows:
- Products&services
- Projects & services.
The Companyâs Chief Operating Decision Maker is the Managing Director.
Revenue and expenses directly attributable to segment are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as Unallocable expenses.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as Unallocable.
The companyâs financing and income taxes are managed on a company level and are not allocated to operating segment.
Segment profit represents the profit and loss before tax earned by each segment without allocation of corporate costs, other income, as well as interest costs. This is the measure reported to the executive management committee for the purposes of resource allocation and assessment of segment performance.
In the Companyâs operations within India there is no significant difference in the economic conditions prevailing in the various states of India. Revenue from sales to customers outside India is less than 10% in the current and previous year. Hence disclosures on geographical segment are not applicable.
2.02 Information about major customers
Included in revenue arising from direct sales of goods and services of Rs 23,705.82 lakhs (March 31, 2018: Rs 35,395.12 lakhs) are revenues of approximately Rs. 18,602.03 lakhs (March 31, 2018: Rs 22,402.61 lakhs) partaining to sales to the companyâs top three (March 31, 2018 : three) customers. No other single customer contributed 10% or more of the Companyâs revenue in year ended March 31, 2019 and March 31, 2018.
3. Employee Benefit plans
3.01 Defined contribution plans
The Company provide Provident Fund facility to all employees. The Company provides superannuation benefits to selected employees. The assets of the plans are held separately from those of the Company in funds under the control of the trustees in case of trust or of the employees provident fund organisation. The contributions are expensed as they are incurred in line with the treatment of wages and salaries. The Companyâs Provident Fund is exempted under section 17 of Employeesâ Provident Fund and Miscellaneous Provision Act, 1952. Conditions for exemption stipulate that the Company shall make good deficiency, if any, in the interest rate declared by the trust vis-a-vis interest rate declared by the Employeesâ Provident Fund Organisation. The liability as on the balance sheet date is ascertained by an independent actuarial valuation.
The Company has recognised an amount of Rs. 423.93 lakhs as expenses for the year ended March 31, 2019 (For the year ended March 31, 2018: Rs. 463.93 lakhs) towards contribution to the following defined contribution plans.
3.02 Defined benefit plans
The Company provides Gratuity benefit to all employees. The Company provides post retirement pension for retired wholetime directors. The assets of the gratuity plans are held separately from those of the Company in funds under the control of the trustees of the independent trusts or with the life insurance companies. The board of trustees of the gratuity fund composed of an equal number of representatives from both employees and employers. The board of the Fund is required by law and by the trust deed to act in the interest of the Fund and of all relevant stakeholders in the scheme. The board of trustee of the fund and management of life insurance company is responsible for the investment policy with regard to the assets of the Fund. Post retirement pension plan is not funded.
Under the gratuity plan, the employees with minimum five years of continuous service are entitled to lumpsum payment at the time of separation calculated based on the last drawn salary and number of years of service rendered with the Company. Under the post retirement pension, the Company pays monthly pension to retired whole-time directors as decided by the board of directors.
These plans expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. Currently, for the plan in India, it has relatively balanced mix of investments in government securities and other debt instruments.
Investment Risk
A decrease in the bond interest rate will increase the plan liability.
Interest risk
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
Salary risk
In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of defined benefit obligation were carried out as at March 31, 2019 by an independent actuary, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
During the year ended March 31, 2019 and March 31, 2018 there was no amendment, curtailments and settlements in the gratuity plan and post retirement pension plans.
The fair value of the above equity and securities issued by government are determined based on quoted market prices in active markets. The fair value of other debt instruments are also determined based on quoted price in active market. The fair value of balance in special deposit scheme is determined based on its carrying value. The fair value of balance with Life Insurance Corporation is determined based on the funds statement received from the company.
The actual return on plan assets was Rs. 41.98 lakhs (for the year ended March 31, 2018: Rs. 1.28 Lakhs).
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase, attrition and mortality. The sensitivity analysis given below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
- If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs. 93.56 lakhs (increase by Rs. 108.27 lakhs) [as at March 31, 2018: decrease by Rs. 98.95 lakhs (increase by Rs. 114.16 lakhs)]
- If the expected salary increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 106.74 lakhs (decrease by Rs. 94.03 lakhs) [as at March 31, 2018: increase by Rs. 112.83 lakhs (decrease by Rs. 99.66 lakhs)]
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected pension increase and mortality. The sensitivity analysis given below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
- If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs. 66.12 lakhs (increase by Rs. 75.88 lakhs) [as at March 31, 2018: decrease by Rs. 71.54 lakhs (increase by Rs. 81.75 lakhs)]
- If the expected pension increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 78.63 lakhs (decrease by Rs. 69.44 lakhs) [as at March 31, 2018: increase by Rs. 84.92 lakhs (decrease by Rs. 75.30 lakhs)]
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
4. Financial instruments
4.01 Capital management
The Company manages its capital to ensure that entities will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Capital structure of the Company consists of net debt (borrowings as detailed in notes 17 and 24 offset by cash and bank balances) and the total equity of the Company.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, long-term borrowings, short-term borrowings, less cash and short-term deposits.
4.02 Financial risk management objectives and policies
The Companyâs principal financial liabilities, other than derivatives, comprise loans and borrowings and trade and other payables. The Companyâs principal financial assets include trade and other receivables, cash and short-term deposits that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions. The Company is exposed to market risk( including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Companyâs policies approved by the board of directors, which provide written principles on foreign exchange risks, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments. The Company does not enter into or trade financial instruments including derivative financial instruments, for speculative purposes.
The corporate treasury management reports on quarterly basis to the board of directors that monitors risks and policies implemented to mitigate risk exposures.
4.03 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Companyâs activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company enters into derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk.
4.04 Foreign currency risk management
The Company enter into sale and purchase transactions and borrowings denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Foreign currency sensitivity analysis
The following table details the Companyâs sensitivity to a 10% increase and decrease in exchange rate between the pairs of currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for 10% change in foreign currency rates. The sensitivity analysis includes trade payables, receivables, external loans as well as loans to foreign operations within the Group where the denomination of the monetary item is in a currency other than the functional currency of the lender or the borrower. The sensitivity analysis has been undertaken on net unhedged exposure in foreign currency.
4.05 Interest rate risk management
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market interest rates. The companyâs exposure to the risk of changes in market interest rates relates primarily to the companyâs long -term debt obligations with floating interest rates.
4.06 Credit risk management
Credit risks refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Companyâs Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables, finance receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks. The Company does not engage in speculative treasury activity but seeks to manage risk and optimise interest and commodity pricing through proven financial instruments.
The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
4.07 Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital lines from various banks. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Liquidity and interest risk tables
The following tables detail the maturity profile of Companyâs non-derivative financial liabilities with agreed repayment period. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.
4.08 Fair value measurements
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.15 to 2.17.
Financial assets and liabilities
The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets and financial liabilities that are not measured at fair value on a recurring basis (but fair value disclosure are required):
Fair value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
- Level 1 â Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2 â Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3 â Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.
5.01 The Company has incurred loss after tax of Rs 10,556.90 lakhs during the year ended March 31, 2019 (March 31, 2018 Rs 14,597.65 lakhs) and accumulated losses as on that date amounting to Rs 45,428.99 lakhs (March 31, 2018 Rs 35,043.77 lakhs), has eroded the net worth of the company. The company expects to generate cash flow from improvements in operations, increased business from the promoter entity, increased efficiencies from the project activities (refer Note 44.03), proceeds from restructuring of its subsidiaries, renewal of the facilities from banks as and when they fall due etc., which will be sufficient to meet future obligation of the company. Accordingly, these financial statements have been prepared on a going concern basis.
5.02 Revenue from construction contracts are recognized on percentage completion method. The estimated cost to complete the contracts is arrived at based on technical data, forecast, assumptions and contingencies and are based on the current market price or firm commitments, as applicable. Such estimates are subject to variations. Variations in the current year are mainly due to new purchase orders raised by the Company on the vendors because they did not agree to perform the work at the originally agreed rate both for materials and labour and in some of the cases old vendors were replaced with new vendors with different commercial terms and condition to expedite the completion of the project.
5.03 During the year the company has issued 12.5% Non convertible redeemable preference shares (âNCRPSâ) of Rs 25,000 lakhs, divided in to 25,00,00,000 preference shares of Rs 10 each to Tata Steel Limited, on private placement basis. NCRPS are in nature of compound financial instrument, accordingly the liability portion amounting to Rs. 2,370.77 Lakhs has been disclosed under long term borrowings (refer Note 17) and residual portion of Rs. 22,629.23 lakhs has been disclosed under other equity (refer Note 16).
5.04 During the financial year 2019 the company has sold York Transport Equipment Pte Limited, a step down subsidiary along with its subsidiaries, at total consideration of Rs 29,087.69 lakhs. Consequent to such sale TRF Singapore Pte Limited has exercised a scheme of capital reduction to the tune of Rs 12,185.28 lakhs on August 31, 2018 and Rs 1,380.40 lakhs on February 28, 2019 which has resulted in reduction in value of investment by Rs 9,790.46 lakhs and foreign currency exchange gain of Rs 3,775.22 lakhs which has been disclosed as exceptional item in those results.
5.05 During the year Interest on loans and Corporate guarantee fees receivable from subsidiary has been converted in to Investment in TRF Singapore Pte Limited which has resulted in increase in value of Investment to Subsidiaries by Rs 978.21 lakhs (refer Note 5).
5.06 The Company has submitted application to RBI in 2013 for capitalisation of corporate guarantee fee (SGD 1,51,230) and interest on loan (USD 7,19,461 and SGD 7,36,637) receivable from TRF Singapore Pte Limited. The same has been approved by RBI vide letter dated 11th September, 2018 subject to compounding for non-compliance with Regulation 15(ii) for Foreign Exchange Management (Transfer or Issue of Any Foreign Security) (Amendment) Regulations, 2004. The Company has filed a compounding application on 12th October, 2018 however RBI has advised to resubmit the application after winding up of one of its step down subsidiary.
5.07 During the year, the company has sold Dutch Lanka Trailers LLC, Oman, a step down subsidiary at book value resulting in a loss of Rs 63.09 Lakhs. This does not have any impact on the standalone financial results.
5.08 In the current year, based on assessment management has considered provision for impairment of Rs 133.18 Lakhs on investment in TRF Singapore PTE Ltd.
5.09 Remuneration to Managing Director amounting to Rs 65.63 lakhs (refer Note 41.01) has been approved by the Board of Directors and is subject to approval from shareholders.
5.10 The Company is in the process of evaluating the impact of the recent Supreme Court Judgment in case of âVivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengalâ and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employeesâ Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of âbasic wagesâ of the relevant employees for the purposes of determining contribution to provident fund under the Employeesâ Provident Funds & Miscellaneous Provisions Act, 1952. Based on the initial assessment of the management which is supported by legal advice, the aforesaid matter is not likely to have significant impact and accordingly, no provision has been made in these Financial Statements at this stage.
6. Operating lease
The Companyâs significant leasing arrangements are in respect of operating leases for premises (residential, office, warehouse etc). The leasing arrangements which normally have a tenure of eleven months to three years are cancellable with a reasonable notice, and are renewable by mutual consent at agreed terms. Lease rentals aggregating to Rs 230.18 lakhs are charged as rent to the statement of profit and loss (for the year March 31, 2018 Rs 303.23 lakhs) (refer Note 35).
7. Previous yearâs figures have been regrouped / reclassified where necessary to correspond with the current yearâs classification / disclosure.
8. Approval of financial statements
The financial statements were approved for issue by the board of directors on April 15, 2019.
Mar 31, 2018
1. General corporate information
TRF Limited, ("the Company") incorporated in 1962 has its Registered Office at 11 Station Road, Burma Mines, Jamshedpur 831007. The Company is listed on the National Stock Exchange of India Limited, BSE Limited and The Calcutta Stock Exchange Limited. The Company undertakes turnkey projects of material handling for the infrastructure sector such as power and ports and industrial sector such as steel plants, cement, fertilisers and mining. The Company is also engaged in production of such material handling equipments at its manufacturing plant at Jamshedpur.
The financial statements are presented in Indian Rupee (INR) which is also Functional Currency of the Company.
1. The cost of inventories recognised as an expense during the year in respect of write downs of inventory to its net realisable value was Rs 116.13 lakhs (for the year ended March 31, 2017 : Rs 146.00 lakhs).
2. The mode of valuation of inventories has been stated in note 2.13.
3. For details of carrying amount of inventories pledged as security for secured borrowings refer note 18.
Notes:
1. Above includes Rs. 24,058.87 lakhs (31.03.2017 Rs 24,903.02 lakhs) retention money which are realisable on completion of the performance guarantee test as per the terms of the relevant contract.
2. Above is net of retention money recoverable amounting to Rs 1,000.00 lakhs ( 31.03.2017 Rs 1,928.53 lakhs) which have been collected against submission of Bank guarantee. Corresponding liability is disclosed as ''Advance received from customer''s under note no-26(a)
3. For details of carrying amount of trade receivables pledged as security for secured borrowings refer note 18.
4. The credit period given to customers range from 0 to 30 days. No interest is charged on the overdue amounts.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance for trade receivable due for more than 12 months, 24 months and 36 months provision is recorded at 25%, 50% and 100% respectively. For Retention receivable due for more than 12 months and 24 months provision is recorded at 50% and 100% respectively.
Rights, preferences and restrictions attached to shares Equity shares
The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is entitled for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.
Note :
(a) General reserve : The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
(b) Reserve for equity instrument through other comprehensive income (OCI) : This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through OCI, net of amounts reclassified to the retained earnings when those assets have been disposed of.
(c) Foreign currency translation reserve : Foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit and loss on repayment of the monetary items or disposal of investment.
(d) Foreign currency monetary item translation difference reserve : Exchange differences arising on settlement and remeasurement of long-term foreign currency monetary items are accumulated in "Foreign Currency Monetary Item Translation Difference Account" and amortised over the maturity period or upto the date of settlement of such monetary items, whichever is earlier, and charged to the Statement of profit and loss.
Note : In view of losses during the year only adjustment is reversal of deferred tax liability created in previous years and hence reconciliation statement is not given.
2. Segment information
2.01 Products and services from which reportable segment derives their revenues
Information reported to the Chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses based on products and services. Accordingly, directors of the Company have chosen to organise the segment based on its product and services as follows:
- Products & services
- Projects & services.
The Company''s chief operating decision maker is the Managing Director.
Revenue and expenses directly attributable to segment are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as Unallocable expenses.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as Unallocable.
The company''s financing and income taxes are managed on a company level and are not allocated to operating segment.
Segment profit represents the profit and loss before tax earned by each segment without allocation of corporate costs, shares of profit of joint ventures, other income, as well as interest costs. This is the measure reported to the executive management committee for the purposes of resource allocation and assessment of segment performance.
In the Company''s operations within India there is no significant difference in the economic conditions prevailing in the various states of India. Revenue from sales to customers outside India is less than 10% in the current and previous year. Hence disclosures on geographical segment are not applicable.
2.02 Information about major customers
Included in revenue arising from direct sales of goods and services (excluding excise duty) of Rs 35,395.12 lakhs (March 31, 2017: Rs 50,583.46 lakhs) are revenues of approximately Rs. 22,402.61 lakhs (March 31, 2017: Rs 30,200.50 lakhs) which arose of the sale to the company''s top three customers. No other single customer contributed 10% or more of the Company''s revenue for both 2017-2018 and 2016-2017.
3. Employee Benefit plans
3.01 Defined contribution plans
The Company provide Provident Fund facility to all employees. The Company provides superannuation benefits to selected employees. The assets of the plans are held separately from those of the Company in funds under the control of the trustees in case of trust or of the employees provident fund organisation. The contributions are expensed as they are incurred in line with the treatment of wages and salaries. The Company''s Provident Fund is exempted under section 17 of Employees'' Provident Fund and Miscellaneous Provision Act, 1952. Conditions for exemption stipulate that the Company shall make good deficiency, if any, in the interest rate declared by the trust vis-a-vis interest rate declared by the Employees'' Provident Fund Organisation. The liability as on the balance sheet date is ascertained by an independent actuarial valuation.
The Company has recognised an amount of Rs. 463.93 lakhs as expenses for the year ended March 31, 2018 (For the year ended March 31, 2017: Rs. 507.92 lakhs) towards contribution to the following defined contribution plans.
3.02 Defined benefit plans
The Company provides Gratuity benefit to all employees. The Company provides post retirement pension for retired wholetime directors. The assets of the gratuity plans are held separately from those of the Company in funds under the control of the trustees of the independent trusts or with the life insurance companies. The board of trustees of the gratuity fund composed of an equal number of representatives from both employees and employers. The board of the Fund is required by law and by the trust deed to act in the interest of the Fund and of all relevant stakeholders in the scheme. The board of trustee of the fund and management of life insurance company is responsible for the investment policy with regard to the assets of the Fund. Post retirement pension plan is not funded.
Under the gratuity plan, the employees with minimum five years of continuous service are entitled to lumpsum payment at the time of separation calculated based on the last drawn salary and number of years of service rendered with the Company. Under the post retirement pension, the Company pays monthly pension to retired whole-time directors as decided by the board of directors.
These plans expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.
Investment Risk The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. Currently, for the plan in India, it has relatively balanced mix of investments in government securities and other debt instruments.
Interest risk A decrease in the bond interest rate will increase the plan liability.
Longevity risk -The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of defined benefit obligation were carried out as at March 31, 2018 by an independent actuary, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
During the year ended March 31, 2018 and March 31, 2017 there was no amendment, curtailments and settlements in the gratuity plan and post retirement pension plans.
The fair value of the above equity and securities issued by government are determined based on quoted market prices in active markets. The fair value of other debt instruments are also determined based on quoted price in active market. The fair value of balance in special deposit scheme is determined based on its carrying value. The fair value of balance with Life Insurance Corporation is determined based on the funds statement received from the company.
The actual return on plan assets was Rs. 1.28 lakhs (for the year ended March 31, 2017: Rs. 17.57 Lakhs).
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase, attrition and mortality. The sensitivity analysis given below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
- If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs. 98.95 lakhs (increase by Rs. 114.16 lakhs) [as at March 31, 2017: decrease by Rs. 130.13 lakhs (increase by Rs. 154.55 lakhs)]
- If the expected salary increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 112.83 lakhs (decrease by Rs. 99.66 lakhs) [as at March 31, 2017: increase by Rs. 151.48 lakhs (decrease by Rs. 130.15 lakhs)]
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected pension increase and mortality. The sensitivity analysis given below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
- If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs. 71.54 lakhs (increase by Rs. 81.75 lakhs) [as at March 31, 2017: decrease by Rs. 49.51 lakhs (increase by Rs. 56.45 lakhs)]
- If the expected pension increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 84.92 lakhs (decrease by Rs. 75.30 lakhs) [as at March 31, 2017: increase by Rs. 58.19 lakhs (decrease by Rs. 51.78 lakhs)]
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
4. Financial instruments
4.01 Capital management
The Company manages its capital to ensure that entities will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Capital structure of the Company consists of net debt (borrowings as detailed in notes 18 and 23 offset by cash and bank balances) and the total equity of the Company.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, long-term borrowings, short-term borrowings, less cash and short-term deposits.
4.02 Financial risk management objectives and policies
The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings and trade and other payables. The Company''s principal financial assets include trade and other receivables, cash and short-term deposits that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions. The Company is exposed to market risk( including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risks, interest rate risk, credit risk, the use of financial derivatives and non derivative financial instruments. The Company does not enter into or trade financial instruments including derivative financial instruments, for speculative purposes.
The corporate treasury management reports on quarterly basis to the board of directors that monitors risks and policies implemented to mitigate risk exposures.
4.03 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company enters into derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk.
Foreign currency sensitivity analysis
The following table details the Company''s sensitivity to a 10% increase and decrease in exchange rate between the pairs of currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for 10% change in foreign currency rates. The sensitivity analysis includes trade payables, receivables, external loans as well as loans to foreign operations within the Group where the denomination of the monetary item is in a currency other than the functional currency of the lender or the borrower. The sensitivity analysis has been undertaken on net unhedged exposure in foreign currency.
4.04 Interest rate risk management
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market interest rates. The company''s exposure to the risk of changes in market interest rates relates primarily to the company''s long -term debt obligations with floating interest rates.
4.05 Credit risk management
Credit risks refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company''s Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables, finance receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks. The Company does not engage in speculative treasury activity but seeks to manage risk and optimise interest and commodity pricing through proven financial instruments.
The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
4.06 Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital lines from various banks. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Liquidity and interest risk tables
The following tables detail the maturity profile of Company''s non-derivative financial liabilities with agreed repayment period. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.
4.07 Fair value measurements
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.15 to 2.17.
Financial assets and liabilities
The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets and financial liabilities that are not measured at fair value on a recurring basis (but fair value disclosure are required):
Fair value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
- Level 1 â Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2 â Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
- Level 3 â Inputs are not based on observable market data (unobservable inputs) Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.
The following table summarises the financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosure are required):
5.01 The Company has incurred loss after tax of Rs 14,597.65 lakhs during the the year ended March 31, 2018, (March 31, 2017: Rs 2,691.10 lakhs) and accumulated losses as of the Balance Sheet date amounting to Rs 35,043.77, (March 31, 2017 Rs 20434.96) has eroded the net worth of the company. The company expects to generate cash flow from improvements in operations resulting from favourable macroeconomic condition, increased business with the promoter entity, increased activities in the product segment, increased efficiencies from the project activities (refer note 43.03), proceeds from restructuring of its subsidiaries including the ones for which the company has non-binding offers and renewal of the facilities from banks as an when they fall due etc. which will be sufficient to meet future obligation of the company. Accordingly, these financial statements have been prepared on a going concern basis.
5.02 Revenue from contracts are recognized on percentage completion method specified under Ind AS 11 - Constructions Contracts. The estimated cost to complete the contracts is arrived at based on technical data, forecast, assumptions and contingencies and are based on the current market price or firm commitments, as applicable. Such estimates / assumptions may be subject to variations but the management has implemented necessary steps and strengthened the internal controls around estimation process which is expected to bring down the fluctuations in the estimated costs.
5.03 Trade Receivable include Rs 820.52 lakhs (net of advance/provision etc.) due from a customer, currently under insolvency proceeding under Insolvency and Bankruptcy Code 2016. Considering the relationship with the customer/criticality of products sold to them etc., as applicable, the management feels that the said receivables are good and recoverable and carrying amount of the same are appropriate.
6.01 Operating lease
The Company''s significant leasing arrangements are in respect of operating leases for premises (residential, office, warehouse etc). The leasing arrangements which normally have a tenure of eleven months to three years are cancellable with a reasonable notice, and are renewable by mutual consent at agreed terms. Lease rentals aggregating to Rs 303.23 lakhs are charged as rent to the statement of profit and loss (for the year March 31, 2017 Rs 306.84 lakhs).
7. Previous year''s figures have been regrouped / reclassified where necessary to correspond with the current year''s classification / disclosure.
8. Approval of financial statements
The financial statements were approved for issue by the board of directors on April 24, 2018.
Mar 31, 2017
1. Above includes Rs. 24,903.02 lakhs (31.03.2016 Rs 25,519.10, 01.04.2015 Rs. 27,639.92 lakhs) retention money which are recoverable on completion of the project as per the terms of the relevant contract.
2. Above also includes retention money recoverable amounting to Rs 1,928.53 lakhs [31.03.2016 Rs. 1,928.53, 01.04.2015 Rs. NIL] which are not due as per the terms of relevant contract and have been collected against submission of Bank guarantee. Corresponding liability is disclosed as ''Advance received from customers under ''note no-28(a)''
3. For details of carrying amount of trade receivables pledged as security for secured borrowings refer note 20.
4. The credit period given to customers range from 0 to 30 days. No interest is charged on the overdue amounts.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance for trade receivable due for more than 12 months, 24 months and 36 months provision is recorded at 25%, 50% and 100% respectively. For Retention receivable due for more than 12 months and 24 months provision is recorded at 50% and 100% respectively.
5. Information about major customers
Included in revenue arising from direct sales of goods and services of(excluding excise duty) Rs 50,583.46 lakhs (March 31, 2016: Rs 54,044.98 lakhs) are revenues of approximately Rs. 30,200.50 lakhs (March 31, 2016: Rs 31,969.55 lakhs) which arose of the sale to the company''s top three customers. No other single customer contributed 10% or more of the Company''s revenue for both 2016-2017 and 2015-2016
6. Employee benefit plans
7. Defined contribution plans
The Company provide Provident Fund facility to all employees. The Company provides superannuation benefits to selected employees. The assets of the plans are held separately from those of the Company in funds under the control of the trustees in case of trust or of the employees provident fund organization. The contributions are expensed as they are incurred in line with the treatment of wages and salaries. The Company''s Provident Fund is exempted under section 17 of Employees'' Provident Fund and Miscellaneous Provision Act, 1952. Conditions for exemption stipulate that the Company shall make good deficiency, if any, in the interest rate declared by the trust vis-a-vis interest rate declared by the Employees âProvident Fund Organization. The liability as on the balance sheet is ascertained by an independent actuarial valuation.
The Company has recognized an amount of Rs. 507.92 lakhs as expenses for the year ended March 31,2017 (For the year ended March 31,2016: Rs.501.21 lakhs) towards contribution to the following defined contribution plans.
8. Defined benefit plans
The Company provides Gratuity benefit to all employees. The Company provides post retirement pension for retired whole-time directors. The assets of the gratuity plans are held separately from those of the Company in funds under the control of the trustees of the independent trusts or with the life insurance companies. The board of trustees of the gratuity fund composed of an equal number of representatives from both employees and employers. The board of the Fund is required by law and by the trust deed to act in the interest of the Fund and of all relevant stakeholders in the scheme. The board of trustee of the fund and management of life insurance company is responsible for the investment policy with regard to the assets of the Fund. Post retirement pension plan is not funded.
Under the gratuity plan, the employees with minimum five years of continuous service are entitled to lump sum payment at the time of separation calculated based on the last drawn salary and number of years of service rendered with the Company. Under the post retirement pension, the Company pays monthly pension to retired whole-time directors as decided by the board of directors.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase attrition and mortality. The sensitivity analysis given below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
- If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs. 130.13 lakhs (increase by Rs. 154.55 lakhs) [as at March 31, 2016: decrease by Rs. 107.92 lakhs (increase by Rs. 125.53 lakhs)]
- If the expected salary increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 151.48 lakhs (decrease by Rs. 130.15 lakhs) [as at March 31, 2016: increase by Rs. 125.53 lakhs (decrease by Rs. 108.64 lakhs)]
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognized in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
- If the expected pension increase growth increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 58.19 lakhs (decrease by Rs. 51.78 lakhs) [ as at March 31, 2016: increase by Rs. 107.46 lakhs (decrease by Rs. 94.56 lakhs)] The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is likely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as applied in calculating the defined benefit obligation liability recognized in the balance sheet. There was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.
9. Financial instruments
10. Capital management
The Company manages its capital to ensure that entities will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Capital structure of the Company consists of net debt (borrowings as detailed in notes 20 and 25 offset by cash and bank balances) and the total equity of the Company.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, long term borrowings, short-term borrowings, less cash and short-term deposits.
11. Financial risk management objectives and policies
The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings and trade and other payables. The Company''s principal financial assets include loans, trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions. The Company is exposed to market risk( including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risks, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments. The Company does not enter into or trade financial instruments including derivative financial instruments, for speculative purposes.
The corporate treasury management reports on quarterly basis to the board of directors that monitors risks and policies implemented to mitigate risk exposures.
12. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company enters into derivative financial instruments to manage _ its exposure to foreign currency risk and interest rate risk.
13. Foreign currency risk management
The Company enter into sale and purchase transactions and borrowings denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.
Foreign currency sensitivity analysis
The following table details the Company''s sensitivity to a 10% increase and decrease in exchange rate between the pairs of currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for 10% change in foreign currency rates. The sensitivity analysis includes trade payables, receivables, external loans as well as loans to foreign operations within the Group where the denomination of the monetary item is in a currency other than the functional currency of the lender or the borrower. The sensitivity analysis has been undertaken on net unhedged exposure in foreign currency.
14. Interest rate risk management
Interest rate risk is the risk that the fair value of future cash flows of financial instrument will fluctuate because of change in market interest rates.The company''s exposure to the risk of changes in market interest rates relates primarily to the company''s long -term debt obligations with floating interest rates.
Interest rate sensitivity analysis
The company manages its interest rate risk by entering into interest rate swap contracts to swap floating interest rates for fixed interest rates over the duration of its borrowings for all its foreign currency long term loans. As at 31 March 2017, for all the long term foreign currency loans, the company has an interest rate swap, wherein the floating interest rates are converted into fixed interest rates.
The sensitivity analysis given below have been determined based on the exposure to interest rates at the end of the reporting period. For floating rate liabilities the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.
- Profit for the year ended March 31,2017 would decrease/increase by Rs. 68.45 lakhs (for the year ended March 31,2016: decrease/increase by Rs. 19.53 lakhs)
The Company''s sensitivity to interest rates has decreased/increased during the current year mainly due to repayment of loan installments matured during the year.
Interest rate swap contracts
The Company enters into interest rate swaps to hedge interest rate risks. Under the interest rate swap contracts, the Company exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Company to mitigate the risk of changing interest rates on the fair value of fixed rate debt and cash flow exposures on variable rate debt. The fair value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using the curves at the end of the reporting period and credit risk inherent in the contract. _
15. Credit risk management
Credit risks refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company''s Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables, finance receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks. The Company does not engage in speculative treasury activity but seeks to manage risk and optimize interest and commodity pricing through proven financial instruments.
The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings.
16. Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital lines from various banks. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecasts and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Liquidity and interest risk tables
The following tables detail the maturity profile of Company''s non-derivative financial liabilities with agreed repayment period. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.
-Level 3 - Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.
The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosure are required):
17. The Company has incurred loss of Rs. 2,691.10 lakhs during the year ended March 31,2017(March 31,2016: Loss of Rs 993.58 lakhs) and the accumulated losses as of the balance sheet date amounting to Rs. 20,434.96 lakhs has eroded the net worth of the Company. The Company expects to generate cash flows from liquidating retention moneys relating to contracts that are in advanced stage of completion and expected dividend remittances from its wholly owned subsidiaries, which will be sufficient to meet future obligations of the Company in the next twelve months from the balance sheet date. Accordingly, the financial statements have been prepared on a going concern basis.
18. No provision has been made for liquidated damages and other claims by certain customers, wherever these have been refuted by the Company and the management expects to settle them without any loss. Pending settlement of these claims, they have been disclosed under contingent liabilities as "Claims against the Company not acknowledged as debt". [Refer Note 44.(e)]. The related sundry debtors balances have been considered in the financial statements as fully recoverable.
19. Scrap and off-cuts generated at the contract sites are being accounted on cash basis, since segregation and quantification of such items at the financial year end are not practicable in view of the contracts being in progress.
20. Revision in projected profit/(loss) on contracts arising from change in estimates of cost to completion of contracts are reflected during the course of the work in each accounting year. These have not been disclosed separately in the Financial Statements as the effect cannot be accurately determined.
21. Operating lease
The Company''s significant leasing arrangements are in respect of operating leases for premises (residential, office, warehouse etc). The leasing arrangements which normally have a tenure of eleven months to three years are cancellable with a reasonable notice, and are renewable by mutual consent at agreed terms. Lease rentals aggregating to Rs 306.84 lakhs are charged as rent to the statement of profit and loss (for the year March 31, 2016 Rs 355.39 lakhs)
22. Under Previous GAAP, non-current investments were stated at cost less provision for diminution in value of investments, if any. Under Ind AS, financial assets in equity instruments, other than equity instruments in Subsidiaries and Joint venture, have been classified as Fair Value through Other Comprehensive Income (FVTOCI) through an irrevocable election at the date of transition.
23. Under previous GAAP, the net mark-to market losses on short term derivative financial instruments, as the Balance Sheet Date, were recognized in statement of profit and loss and the net gains, if any, were ignored. In case of long term derivative contracts, the exchange difference were recognized to statement of profit and loss through foreign currency long term monetary items. Under Ind AS, such derivative financial instruments are to be recognized at fair value and the movement is recognized in statement of profit and loss.
24. Loan processing fees/transaction cost under Ind AS is considered for calculating effective interest rate. The impact for the period subsequent to the date of transition is accounted in the statement of profit and loss.
25. On the date of transition, deferred tax impact on transition provision has been accounted in the Reserves, and consequential impact is accounted in the statement of profit and loss for the subsequent periods.
26. Defined benefit plans-under Ind AS, actuarial gain or losses arising on defined benefit plans are recognized in other comprehensive income, whereas under previous GAAP same was being charged to the statement of profit and loss.
27. Under the Previous GAAP, total comprehensive income was not reported therefore, the above reconciliation starts with profit under previous GAAP.
28. Reconciliation of Statement of Cash Flow
There are no material adjustments to the Statement of Cash Flows as reported under the Previous GAAP.
29. Previous year''s figures have been regrouped / reclassified where necessary to correspond with the current year''s classification / disclosure.
30. Approval of financial statements
The financial statements were approved for issue by the board of directors on May 23,2017.
Mar 31, 2016
Note:
1. Others include Rs. 25,519.10lakhs (31.03.2015 Rs. 27,639.92 lakhs) retention money which are recoverable on completion of the project as per the terms of the relevant contract. The retention money Rs. 5,305.99 lakhs (31.03.2015 Rs. 3,623.29 lakhs) are recoverable within the operating cycle of the Company but due after a period of one year
2. Others also include retention money recoverable amounting to Rs 1,928.53 lakhs which are not due as per the terms of relevant contract and have been collected against submission of Bank guarantee. Corresponding liability is disclosed as âAdvance received from customers under ânote no-10(e)''
Notes:
i) Consumption figures disclosed above are inclusive of adjustments for excess or shortage found during physical verification, write off of unserviceable items etc.
ii) Consumption of steel disclosed above is net of credit against sale of scrap of Rs. 618.69 lakhs (Previous year: Rs.709.45 lakhs)
3. The Company has incurred loss of Rs. 467.36 lakhs during the year ended March 31,2016(Previous year: Loss of Rs 8,735.12 lakhs) and the accumulated losses as of the balance sheet date amounting to Rs. 17,407.58 lakhs has eroded the net worth of the Company. The Company expects to generate cash flows from liquidating retention moneys relating to contracts that are in advanced stage of completion and expected dividend remittances from its wholly owned subsidiaries, which will be sufficient to meet future obligations of the Company in the next twelve months from the balance sheet date. Accordingly, the financial statements have been prepared on a going concern basis.
4.The Board of Directors based on the audited accounts for the year ended March 31, 2015 have concluded that the company is a Sick Company within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (special Provision) Act, 1985 (SICA). The Board of Directors has made a reference under section 15 of SICA to the Board for Industrial and Financial Reconstruction (BIFR).The company has during the year filed a rehabilitation scheme with BIFR.
5.The management had re-estimated the useful life of the fixed assets and aligned the useful life with that indicated in Part C of Schedule II to the 2013 Act at the commencement of financial year 2014-15. During the process the Company has also reclassified certain assets the effect of which has been reflected in "Other reclassification" line in Note 11.
6. No provision has been made for liquidated damages and other claims by certain customers, wherever these have been refuted by the Company and the management expects to settle them without any loss. Pending settlement of these claims, they have been disclosed under contingent liabilities as Claims against the Company not acknowledged as debt. [Refer Note 27.01.(e)]. The related sundry debtors balances have been considered in the financial statements as fully recoverable.
7. Scrap and off-cuts generated at the contract sites are being accounted on cash basis, since segregation and quantification of such items at the financial yearend are not practicable in view of the contracts being in progress.
8. Revision in projected profit/(loss) on contracts arising from change in estimates of cost to completion of contracts are reflected during the course of the work in each accounting year. These have not been disclosed separately in the Financial Statements as the effect cannot be accurately determined.
9.The amortized portion of foreign exchange loss (net) incurred on long term foreign currency monetary items for the current year ended March 31,2016 is Rs. 141.01 lakhs (31.03.2015 Rs. 254.58 lakhs) The unamortized portion carried forward as on 31st March, 2016 is Rs. 127.83 lakhs (31.03.2015 : Rs. 268.84 lakhs)
10. Segment Reporting
The Company has identified the business segments as primary segment for the purpose of reporting under Accounting Standards (AS) 17 - Segment Reporting . Revenues and expenses directly attributable to business segments are reported under the respective segments. Expenses which are not directly identifiable to each of the business segments have been allocated on the basis of associated revenues and manpower efforts. All other expenses which are not attributable or allocable to business segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to business segments are disclosed under the respective segments. All other assets and liabilities are included as part of unallocable. The Company has identified the following business segments as primary segments
(a) Products & Services
(b) Projects & Services
In the Company''s operations within India there is no significant difference in the economic conditions prevailing in the various states of India. Revenue from sales to customers outside India is less than 10% in the current and previous year. Hence disclosure on geographical segment are not applicable.
11. Previousyear''s figures have been regrouped / reclassified where necessary to correspond with the current yearâs classification / disclosure.
Mar 31, 2015
1. General corporate information
TRF Limited, ("the Company") incorporated in 1962 has its Registered
Office at 11 Station Road, Burma Mines, Jamshedpur 831007. The Company
is listed on the National Stock Exchange of India Limited, BSE Limited
and The Calcutta Stock Exchange Limited. The Company undertakes turnkey
projects of material handling for the infrastructure sector such as
power and ports and industrial sector such as steel plants, cement,
fertilisers and mining. The Company is also engaged in production of
such material handling equipments at its manufacturing plant at
Jamshedpur.
2. Rights, preferences and restrictions attached to shares i) Equity
Shares
The Company has one class of equity shares having a par value of Rs.I0
per share. Each shareholder is entitled for one vote per share held.
The dividend proposed by the board of directors is subject to the
approval of the shareholders in the ensuing annual general meeting,
except in case of interim dividend. In the event of liquidation, the
equity shareholders are entitled to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion
to the number of equity shares held by the shareholders.
3. Additional information to the Financial Statements
As at As at
31.03. 31.03.
2015 2014
Rs. lac Rs. lac
Contingent Liabilities
a) Sales tax matters in dispute relating
to issues of applicability and
classification # 22,278.19 20,593.37
In respect of the above sales tax
matters in dispute, the Company has
deposited Rs. 80.19 lac
(31.03.2013: Rs.15.37 lac) against
various orders, pending disposal of the
appeals. This amount is included under
Note 14 - Long term loans and advances.
b) Excise duty and service tax matters 1,415.65 1,006.32
in dispute relating to
applicability and
classification
In respect of the above excise and
service tax matters in dispute, the
Company has deposited Rs.40 lac
(31.03.2013: Rs.2.50 lac) against
various orders, pending disposal of the
appeals. This amount is
included under Note 14 - Long
term loans and advances.
c) Income tax matters in dispute 3,450.48 1,543.90
d) Corporate guarantee given on behalf of
subsidiary companies
i) York Transport Equipment (Asia)
Pte Limited - USD 18.0 M
(31.03.2014:USD 22.5 m) 11,284.34 13,544.96
Loan outstanding against the guarantee 11,045.74 10,792.41
ii) Dutch Lanka Trailer Manufacturers
Limited - USD 1.5 m
(31.03.2014 : USD 1.5 m) 940.36 903.00
Load outstanding against the guarantee - 185.71
e) Claims against the Company not acknowledged
as debt (Primarily of liquidated damages and
other claims made by customers) 3,385.76 3,502.48
f) Others 33.42 33.42
Future cash outflows in respect of above matters are determinable only
on receipt of judgments/decisionspendingatvariousforums/authorities.
# Includes an amount of Rs. 18,388.57 lac (31.03.2014 Rs. 18,388.57
lac) towards differential tax and penalty charged by the Assessing
Officer for the financial year 2005-06 to 2008-09. The Assessing
Officer had originally passed the assessment order based on the returns
filed by the Company. Subsequently based on an objection raised by the
Accountant General's Office during their audit the assessing officer
has raised this demand on 28.01.2013 for additional tax of Rs. 5,985.90
lac and penalty of Rs.12,402.67 lac. The additional tax is computed by
the assessing office based on the total turnover reported in the annual
audited financial statements. The difference in the turnover as per the
annual financial statements and the returns is on account of difference
in revenue recognised as per Accounting Standard (AS)- 7 Construction
Contracts visa a vis bills actually raised on the customers and
turnover from turnkey contracts which are executed outside the state of
Jharkhand for which state of Jharkhand has no jurisdiction. The returns
for those turnkey contracts are filed with the local VAT authorities of
the respective states under the respective VAT laws. The assessing
officer's contention of suppression in turnover is blatantly incorrect
and hence the Company filed appeal with the Joint Commissioner. The
Joint Commissioner after hearing the Company has passed orders
remanding back the case for reassessment to the assessment officer.
Based on the order the assessing officer has initiated reassessment
procedures and the Company has filed its reply/documents called by the
Assessing Officer. Neither company made any payment nor department has
claimed any payment against above impugned demand in respect of appeal
order.
4. The Company's application seeking exemption from the provisions
of the Employees State Insurance Act, 1948 has been rejected by the
Department of Labour, Government of Jharkhand. The Company has filed an
appeal with the High Court of Jharkhand at Ranchi against the order. In
the absence of any demand from the authorities the amount of liability
is not quantifiable.
5. The Company has incurred losses of Rs. 8,735.12 lac during the
year ended March 31, 2015 and the accumulated losses as on that date,
amounting to Rs 16,940.22 lac has eroded the net worth of the Company.
As at the balance sheet date, the current liabilities of the Company
exceed the current assets of the Company by Rs. 5,798.88 lac The
Company is of the view that all potential future losses which has been
booked during the current year will not result in immediate outflow
over the next twelve months from the balance sheet date. Further, the
Company projects operating profits during the next 12 months from the
balance sheet date and is confident that it will be able to generate
cash from liquidating the retention money held by the customers for a
majority of the contracts which are at an advanced stage. Further, the
Company expects to generate cash flows from its certain subsidiaries,
by way of dividend. Given the above facts, the Company will be able to
sufficiently generate future cash flows to meet the future obligations
of the Company in the next twelve months from the balance sheet date.
Accordingly, these financial statements have been prepared on a going
concern basis and do not include any adjustments relating to the
recoverability and classification of recorded assets or to amounts and
classification of liabilities that might result if the Company is
unable to continue as a going concern.
6. The management has re estimated the useful life of the fixed
assets and aligned the useful life with that indicated in Part C of
Schedule II to the 2013 Act at the commencement of the year. During the
process the Company has also reclassified certain assets the effect of
which has been reflected in "Adjustment" column in Note 11. As per the
requirements of the transitional provisions, the carrying amount after
adjusting the residual value (if any) of assets whose remaining useful
life was nil as at the transition date of Rs. 67.76 lac has been
recognised in the statement of profit and loss and included as part of
depreciation for the current year.
7. No provision has been made for liquidated damages and other
claims by certain customers, wherever these have been refuted by the
Company and the management expects to settle them without any loss.
Pending settlement of these claims, they have been disclosed under
contingent liabilities as Claims against the Company not acknowledged
as debt. [Refer Note 28.01.(e)].The related sundry debtors balances
have been considered in the financial statements as fully recoverable.
8. The Company is offering the retention money to income tax on due
basis from the financial year 2005-06 onwards. Out of prudence the
Company was providing for the current tax without considering this
deferment. The Company's stand of deferring the retention money has been
accepted by the tax authorities based on the legal decisions which came
subsequently. During the previous year the Company has recomputed the
provision for current tax based on the income determined in the final
assessment orders for the financial year 2005-06 to 2009-10 and based on
the income offered to tax in the tax returns for the financial years
2010-11 to 2012-13. The Company has also provided for the deferred tax
on the net amount of retention deferred in the income tax returns.
9. Scrap and off-cuts generated at the contract sites are being
accounted on cash basis, since segregation and quantification of such
items at the financial year end are not practicable in view of the
contracts being in progress.
10. Revision in projected profit/(loss) on contracts arising from
change in estimates of cost to completion of contracts are reflected
during the course of the work in each accounting year. These have not
been disclosed separately in the Financial Statements as the effect
cannot be accurately determined.
The Company has identified the business segments as primary segment for
the purpose of reporting under Accounting Standards (AS) 17 - Segment
Reporting . Revenues and expenses directly attributable to business
segments are reported under the respective segments. Expenses which are
not directly identifiable to each of the business segments have been
allocated on the basis of associated revenues and manpower efforts. All
other expenses which are not attributable or allocable to business
segments have been disclosed as unallocable expenses. Assets and
liabilities that are directly attributable or allocable to business
segments are disclosed under the respective segments. All other assets
and liabilities are included as part of unallocable. The Company has
identified the following business segments asprimary segments
(a) Products & Services
(b) Projects & Services
In the Company's operations within India there is no significant
difference in the economic conditions prevailing in the various states
of India. Revenue from sales to customers outside India is less than
10% in the current and previous year. Hence disclosure on geographical
segment are not applicable.
Information on related party transactions as per Accounting Standards
(AS) 18 - Related party Disclosures A) List of related parties and
relationship
11. Name of the related party Nature of Relationship
TRF Singapore Pte Ltd. Subsidiary Companies the
ownership
TRF Holdings Pte Limited of which is held directly
by the
Adhithya Automotive Application Pvt Ltd Company
YORK Transport Equipment (Asia) Pte Ltd.
YORK Transport Equipment Pty Ltd.
YORK Sales (Thailand) Co. Ltd
YTE Transport Equipment (SA) (Pty) Limited
Rednet Pte Ltd.
PTYORK Engineering
YTE Special Products Pte Ltd Subsidiary Companies the
ownership of which
Qingdao YTE Special Products Co. Ltd. is held through subsidiary
(ies)
YORK Transport Equipment (India) Pvt. Ltd.
YORK Transport Equipment (Shanghai) Co. Ltd.
Dutch Lanka Trailer Manufacturers Limited
Dutch Lanka Engineering Pvt Ltd
Dutch Lanka Trailers LLC
Hewitt Robins International Holding Ltd.
Hewitt Robins International Ltd.
Tata Steel Limited Promoter Company holding
more than 20%
Key Managerial Personnel
Mr. Sudhir L. Deoras Managing Director
12. Previous year's figures have been regrouped/reclasified where
necessary to correspond with the current year's
classification/disclosure.
Mar 31, 2014
1. Additional information to the Financial Statements
As at As at
31.03.2014 31.03.2013
Rs. lac Rs. lac
1.01 Contingent Liabilities
a) Sales tax matters in dispute
relating to issues of applicability
and classification # 20,593.37 20,269.89
In respect of the above sales tax
matters in dispute, the Company has
deposited Rs.15.37 lac (31.03.2013:
Rs.Nil) against various orders,
pending disposal of the appeals.
This amount is included under Note 14
- Long term loans and advances.
b) Excise duty and service tax
matters in dispute relating to
applicability and classification 1,006.32 1,004.91
In respect of the above excise and
service tax matters in dispute, the
Company has deposited Rs.2.50 lac
(31.03.2013: Rs.2.50 lac) against
various orders, pending disposal of
the appeals. This amount is
included under Note 14 -
Long term loans and advances.
c) Income tax matters in dispute 1,543.90 1021.57
d) Corporate guarantee given on
behalf of subsidiary companies
i) York Transport Equipment
(Asia) Pte Limited - USD 22.5 m
(31.03.2013: USD 22.5 m) 13,544.96 12,260.09
Loan outstanding against the guarantee 10,792.41 9,663.76
ii) Dutch Lanka Trailer
Manufacturers Limited -
USD 1.5 m (31.03.2013: USD 1.5m) 903.00 817.34
Loan outstanding against the guarantee 185.71 817.34
e) Claims against the Company not
acknowledged as debt (Primarily of
liquidated damages and other claims
made by customers) 3,502.48 4,587.84
f) Others 33.42 33.42
Future cash outflows in respect of above matters are determinable only
on receipt of judgments / decisions pending at various forums /
authorities.
# Includes an amount of Rs. 18,388.57 lac (31.03.2013 Rs. 18,388.57
lac) towards differential tax and penalty charged by the Assessing
Officer for the financial year 2005-06 to 2008-09. The Assessing
Officer had originally passed the assessment order based on the returns
filed by the Company. Subsequently based on an objection raised by the
Accountant General''s Office during their audit the assessing officer
has raised this demand on 28.01.2013 for additional tax of Rs. 5,985.90
lac and penalty of Rs.12,402.67 lac. The additional tax is computed by
the Assessing Officer based on the total turnover reported in the
annual audited financial statements. The difference in the turnover as
per the annual financial statements and the returns is on account of
difference in revenue recognised as per Accounting Standard (AS) - 7
Construction Contracts vis-a-vis bills actually raised on the customers
and turnover from turnkey contracts which are executed outside the
state of Jharkhand for which state of Jharkhand has no jurisdiction.
The returns for those turnkey contracts are filed with the local VAT
authorities of the respective states under the respective VAT laws. The
assessing officer''s contention of suppression in turnover is blatantly
incorrect and hence the Company filed appeal with the Joint
Commissioner. The Joint Commissioner after hearing the Company has
passed orders remanding back the case for reassessment to the
assessment officer. Based on the order the assessing officer has
initiated reassessment procedures and the Company has filed its
reply/documents called by the Assessing Officer. Neither company has
made any payment nor department has claimed any payment against above
impugned demand in respect of appeal order.
1.02 The Company''s application seeking exemption from the provisions
of the Employees State Insurance Act, 1948 has been rejected by the
Department of Labour, Government of Jharkhand. The Company has filed an
appeal with the High Court of Jharkhand at Ranchi against the order. In
the absence of any demand from the authorities the amount of liability
is not quantifiable.
1.03 No provision has been made for liquidated damages and other
claims by certain customers, wherever these have been refuted by the
Company and the management expects to settle them without any loss.
Pending settlement of these claims, they have been disclosed under
contingent liabilities as Claims against the Company not acknowledged
as debt. [Refer Note 28.01.(e)]. The related sundry debtors balances
have been considered in the financial statements as fully recoverable.
1.04 The Company is offering the retention money to income tax on due
basis from the financial year 2005-06 onwards. Out of prudence the
Company was providing for the current tax without considering this
deferment. The Company''s stand of deferring the retention money has
been accepted by the tax authorities based on the legal decisions which
came subsequently. Hence during the current year the Company has
recomputed the provision for current tax based on the income determined
in the final assessment orders for the financial year 2005-06 to
2009-10 and based on the income offered to tax in the tax returns for
the financial years 2010-11 to 2012-13. The Company has also provided
for the deferred tax on the net amount of retention deferred in the
income tax returns.
1.05 Scrap and off-cuts generated at the contract sites are being
accounted on cash basis, since segregation and quantification of such
items at the end of the financial year are not practicable in view of
the contracts being in progress.
1.06 Revision in projected profit/(loss) on contracts arising from
change in estimates of cost to completion of contracts are reflected
during the course of the work in each accounting year. These have not
been disclosed separately in the Financial Statements as the effect
cannot be accurately determined.
1.07 Previous year''s figures have been regrouped / reclassified where
necessary to correspond with the current year''s classification /
disclosure.
1.08 The amortized portion of foreign exchange loss (net) incurred on
long term foreign currency monetary items for the current year ended
March 31, 2014 is Rs. 798.39 lac (previous year Rs. 526.61 lac). The
unamortized portion carried forward as on 31st March, 2014 is Rs.
521.65 lac (31.03.2013 : Rs. 284.75 lac).
1.09 Segment Reporting
The Company has identified the business segments as primary segment for
the purpose of reporting under Accounting Standards (AS) 17 - Segment
Reporting. Revenues and expenses directly attributable to business
segments are reported under the respective segments. Expenses which are
not directly identifiable to each of the business segments have been
allocated on the basis of associated revenues and manpower efforts. All
other expenses which are not attributable or allocable to business
segments have been disclosed as unallocable expenses. Assets and
liabilities that are directly attributable or allocable to business
segments are disclosed under the respective segments. All other assets
and liabilities are included as part of unallocable. The Company has
identified the following business segments as primary segments.
(a) Products & Services
(b) Projects & Services
In the Company''s operations within India there is no significant
difference in the economic conditions prevailing in the various states
of India. Revenue from sales to customers outside India is less than
10% in the current and previous year. Hence disclosure on geographical
segment are not applicable.
Mar 31, 2013
TRF Limited, incorporated in 1962 has its registered office at 11
Station Road, Burma Mines, Jamshedpur 831007. The Company is listed on
the National Stock Exchange of India Limited, BSE Limited and The
Calcutta Stock Exchange Limited. TRF Limited undertakes turnkey
projects of material handling for the infrastructure sector such as
power and steel plants, cement, ports, fertilisers and mining. The
Company is also engaged in production of such material handling
equipments at its plant at Jamshedpur.
(i) During the year ended March 31, 2012, the Company had set up a
100% subsidiary, TRF Holdings Pte Ltd at Singapore. Further during the
previous year, the Company through its wholly owned subsidiaries TRF
Singapore Pte Ltd. and TRF Holdings Pte. Ltd. have acquired the balance
49% shareholding in its subsidiary Dutch Lanka Trailers Manufacturers
Limited (DLT), a Sri Lanka based company and 49% in York Transport
Equipment (Asia) Pte Ltd, a Singapore based company for purchase
consideration of USD 8.33 million and USD 18 million respectively
making them a wholly owned subsidiaries.
(ii) No provision has been made for liquidated damages and other
claims by certain customers, wherever these have been refuted by the
Company and it expects to settle them without any loss. Pending
settlement of these claims, the relative sundry debtors balances have
been shown in the accounts as fully recoverable and have been disclosed
as contingent liabilities under Claims against the Company not
acknowledged as debt. (Refer note 25 (i)(h))
(iii) Scrap and off- cuts at the contract sites are being accounted on
cash basis, since segregation and quantification of such items at the
financial year end is not practicable in view of the contracts being in
progress.
(iv) Revision in projected profit/(loss) on contracts arising from
change in estimates of cost to completion of contracts are reflected
during the course of the work in each accounting year. These have not
been disclosed in the Financial Statement as the effect cannot be
accurately determined.
(v) Related party disclosures:
Information relating to related party transactions as per Accounting
Standard 18 notified by the Companies (Accounting Standards) Rules,
2006. A) List of related parties and relationship
a) TRF Singapore Pte Ltd.
YORK Transport Equipment (Asia) Pte Ltd.
YORK Transport Equipment Pty Ltd.
YORK Sales (Thailand) Co. Ltd
YTE Transport Equipment (SA) (Pty) Limited
YORK Transport Equipment (Malaysia) Sdn Bhd*
Rednet Pte Ltd.
PT YORK Engineering YTE Special Products Pte Ltd
Qingdao YTE Special Products Co. Ltd. Z''
YORK Transport Equipment India Pvt. Ltd.
YORK Transport Equipment (Shanghai) Co. Ltd.
Dutch Lanka Trailer Manufacturers Limited Dutch Lanka Engineering Pvt
Ltd Dutch Lanka Trailers Manufacturers LLC Hewitt Robins International
Holding Ltd.
Hewitt Robins International Ltd.
b) TRF Holdings Pte Ltd. (w.e.f 02.02.2012)
c) Adithya Automotive Application Pvt Ltd
d) Tata Steel Limited
e) Key Management Personnel Mr. Sudhir L. Deoras
Note: Related parties have been identified by the management
ÂLiquidated during the year
(vi) Provision of Rs.131.30 lakhs (At at 31.03.2012 : Rs 147.00 lakhs)
has been made for anticipated warranty costs relating to certain
products manufactured and sold by the Company upto March 31, 2013 on
the basis of technical and available cost estimates.
(vii) Previous year''s figures have been regrouped / reclassified wherever
necessary to correspond with the current year''s classification /
disclosure.
Mar 31, 2012
1. Additional Information to the Financial Statements
March 31, 2012 March 31, 2011
Rs. in lakhs Rs. in lakhs
(i) CONTINGENT LIABILITIES
(a) Sales tax matters in
dispute relating to issues of
applicability and classification 57.90 575.52
In respect of the above sales
tax matters in dispute, the
Company has deposited Nil
(previous year Rs.10.54 lakhs)
against various orders, pending
disposal of the appeals. This
amount is included under Note 13
- Long term loans and advances
(b) Excise duty and service tax
matters in dispute relating to
applicability and classification 159.22 1,114.29
In respect of the above excise
and service tax matters in dispute,
the Company has deposited
Rs.2.50 lakhs (Previous year
Rs.2.50 lakhs) against various
orders, pending disposal of the
appeals. This amount is included
under Note 13 - Long term loans
and advances.
(c) Income Tax matters in dispute 1,314.91 1,645.79
(d) Corporate guarantee given on
behalf of subsidiary company
(SGD 9.5 million) 3,864.60 3,398.15
(Outstanding amount against the
guarantee ) (966.16) (1,982.25)
(e) Corporate guarantee given on
behalf of subsidiary company
(USD 18.00 million) 9,220.77 -
(Outstanding amount against the
guarantee) (9,220.77) -
(f) Corporate guarantee on behalf
of step down subsidiary company
(USD 0.765 million) 391.88 -
(Outstanding amount against the
guarantee) (391.88) -
(g) Claims against the Company not
acknowledged as debt 535.83 461.00
(h) Others 33.42 23.42
Future cash outflows in respect of
above matters are determinable only
on receipt of judgments/decisions
pending at various forums/ authorities
(ii) The Company has agreed to
provide contingent support to its
wholly owned direct subsidiary
(WOS), TRF Singapore Pvt. Ltd and
TRF Holdings Pvt. Ltd to meet its
liabilities of SGD 2,418,370
(previous year SGD 3,292,000) and
USD 51,400 respectively, only in the
event of the WOS being unable to
generate the required liquidity
internally or externally
(iii) Estimated amount of contracts
remaining to be executed on
capital account and not provided for 477.77 361.99
(iv) Disclosures required under
Section 22 of the Micro, Small and
Medium Enterprises Development
Act, 2006 as at March 31, 2012
(Note 8 - Trade payables) is as under
(a) The Principal amount remaining
unpaid to supplier as at the
end of accounting year 274.29 195.39
(b) The Interest due thereon
remaining unpaid to suppliers as at
the end of the accounting year 10.64 1.53
(c) The amount of interest paid in
terms of sec 16, along with the
amount of payment made to supplier
beyond the appointment day during
the year 2011-12 _ _
(d) The amount of interest due and
payable for the period of delay in
making payment (which have been
paid beyond the appointment date
during the year but without adding
interest specified under this act) 12.95 10.43
(e) The amount of interest accrued
during the year and remaining unpaid
at the end of the accounting year 23.59 11.96
The above information has been given to the extent such suppliers could
be identified on the basis of information available with the Company
and the same has been relied upon by the auditors.
(v) Revision in projected profit/(loss) on contracts arising from
change in estimates of cost to completion of contracts are reflected
during the course of the work in each accounting year. These have not
been disclosed in the Financial Statement as the effect cannot be
accurately determined.
(vi) During the year ended March 31, 2012, the Company has set up a
100% subsidiary, TRF Holdings Pvt. Ltd at Singapore.
The Company through its wholly owned subsidiaries TRF Singapore Pte
Ltd. and TRF Holdings Pvt. Ltd. have acquired the balance 49%
shareholding in its subsidiary Dutch Lanka Trailers Manufacturers
Limited (DLT), a Sri Lanka Based Company and 49% in York Transport
Equipment (Asia) PTE Ltd, a Singapore based company for purchase
consideration of USD 8.33 million and USD 18 million respectively
making those a wholly owned subsidiary.
(vii) No provision has been made for liquidated damages and other claims
by certain customers, wherever these have been refuted by the Company
and it expects to settle them without any loss. Pending settlement of
these claims, the relative sundry debtors balances have been shown in
the accounts as fully recoverable and have been disclosed as contingent
liabilities under Claims against the Company not acknowledged as debt.
[Refer note 25 (i) (g)].
(viii) Scrap and off- cuts at the contract sites are being accounted on
cash basis, since segregation and quantification of such items at the
financial year end is not practicable in view of the contracts being in
progress.
(ii) (a) The Company makes Provident Fund and Superannuation Fund
contributions to defined contribution plans for qualifying employees.
Under the Schemes, the Company is required to contribute a specified
percentage of the payroll costs to fund the benefits. The company has
recognized in the Statement of Profit and Loss an amount of Rs. 505.48
lakhs ( previous year Rs. 451.76 lakhs) under defined contribution
plans.
under the group gratuity scheme. Expenses recognized in the period as
disclosed above excludes Rs. 10 lakhs (previous year Rs. 9.39 lakhs)
contributions made by P& YE division to LIC. Amount recognized in the
balance sheet as disclosed above excludes Rs.10 lakhs (previous year
Rs. Nil lakhs) pertaining to P & YE division. Disclosures pursuant to
AS - 15 have not been made in respect of the Post retirement Gratuity
plan of P&YE division as details have not been furnished by LIC to the
company and the amounts are not expected to be material. The basis used
to determine overall expected rate of return on assets and the effect
on major categories of plan assets is as follows:
The major portions of the assets are invested in PSU Bonds and Special
Deposits. The long term estimate of the expected rate of return on the
fund assets have been arrived at based on the asset allocation and
prevailing yield rates on these asset classes. Assumed rate of return
on assets is expected to vary from year to year reflecting the returns
on matching Government Bonds.
(ix) SEGMENT INFORMATION
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
Notes:
Pursuant to the 'Accounting Standard on Segment Reporting' (AS-17)
notified by the Companies (Accounting Standard) Rules 2006, the Company
has considered 'business segment' as primary segment for disclosure.
The Company has identified business segments mentioned below as primary
segments :
(i) Products & Services
(ii) Projects & Services
There is no significant difference in the business conditions
prevailing in various states of India, where the Company has its
operation. Revenue from sales to external customers outside India is
less than 10% of the Company's total revenue. Hence, geographical
segment disclosures are not considered necessary.
(x) Consequent upon the resignation of the Company Secretary of the
Company with effect from December 1, 2011, the company is in the
process of appointing a full time Company Secretary under the provision
of section 383A of the Companies Act 1956. As a result, these financial
statements have not been authenticated by a whole time Company
Secretary under section 215 of the Companies Act 1956. In the absence
of the Company Secretary, the Controller of Accounts has been appointed
as the Compliance Officer.
(xi) The Revised Schedule VI has become effective from 1 April, 2011
for the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year's figures have been regrouped / reclassified
wherever necessary to correspond with the current year's classification
/ disclosure.
Mar 31, 2010
March 31, 2010 March 31, 2009
Rupees in lakhs Rupees in lakhs
(i) CONTINGENT LIABILITIES
(a) Sales tax matters in dispute 106.33 291.52
In respect of the above
sales tax matters in dispute, the
Company has deposited
Rs.34.10 lakhs (previous year Rs.
19.54 lakhs) against various orders,
pending disposal of the appeals.
This amount is included under Schedule
10 - Loans and Advances, considered good.
(b) The excise authorities have issued
demand notices/show cause
notices concerning excise duty / service
tax and penalty which have
been refuted by
the Company and are pending disposal. 967.74 12.67
In respect of the above excise and service
tax matters in dispute, the
Company has deposited Rs.2.50 lakhs (Previous
year Rs.2.50 lakhs)
against various orders, pending disposal of
the appeals. This amount is
included under Schedule 10 - Loans and
Advances, considered good.
(c) Service Tax matters in dispute 146.55 28.16
(d) Taxation matters in dispute 1,382.68 25.47
(e) Corporate guarantee on behalf of
subsidiary company (SGD 9.5 million) 3,051.12 3,167.30
(f) Others 23.42 23.42
(ii) Estimated amount of contracts
remaining to be executed on capital
account and not provided for 1,089.97 989.21
(iii) Provision of Rs. 99.00 lakhs (Previous year :Rs 92.00 lakhs) has
been made for anticipated warranty costs relating to certain products
manufactured and sold by the Company upto March 31, 2010 on the basis
of technical and available cost estimates, which being technical
matters have been relied upon by the auditors.
(iv) Revision in projected profit/(loss) on contracts arising from
change in estimates of cost to completion of contracts are reflected
during the course of the work in each accounting year. These have not
been disclosed in the Financial Statement as the effect cannot be
accurately determined.
(v) The Board of Directors of the Company at its meeting held on June
16, 2009 approved the issue of bonus shares in the ratio of 1:1 (one
share for every share held by the existing shareholders of the
Company). The share holders at the annual general meeting held on July
20, 2009 approved the Bonus issue and the bonus shares were alloted on
August 6, 2009. These bonus shares amounting to Rs.550.22 lakhs were
issued by capitalisation of General Reserves of the Company.
(vi) The Company has entered into a Shareholders Agreement on June 1,
2009 with M/s Jasper Industries Pvt. Ltd. and M/s Tata Capital Ltd to
form a subsidiary Adithya Automotive Applications Pvt. Ltd.(AAA).
Pursuant to the Shareholders Agreement, the Company has subscribed to
20,40,000 equity shares of Rs. 10 each in AAA Pvt. Ltd. by investing
Rs. 204.00 lakhs. The Company has further subscribed 15,30,000 equity
shares of Rs. 10 each during the year by investing Rs. 153.00 lakhs.
The Shareholding pattern of AAA as on March 31, 2010 is as follows:
a. TRF Ltd. - 51%
b. Jasper Industries Pvt Ltd. - 29.05%
c. Tata Capital Ltd. - 19.95%
(vii) The Company through further infusion of capital in its wholly
owned subsidiary TRF Singapore Pte Ltd has acquired 51% shares of Dutch
Lanka Trailer Manufacturers Limited (DLT) a Sri Lanka based Company
engaged in manufacture of trailers by investing USD 8.67 million. This
has been funded by raising an External Commercial Borrowing of USD 9
million from DBS Bank, Singapore to be repaid over a period of 5 years.
(viii) No provision has been made for liquidated damages and other claims
by certain customers, wherever these have been refuted by the Company
and it expects to settle them without any loss. Pending settlement of
these claims, the relative sundry debtors balances have been shown in
the accounts as fully recoverable.
(ix) Scrap and off- cuts at the contract sites are being accounted on
cash basis, since segregation and quantification of such items at the
financial year end is not practicable in view of the contracts being in
progress. Stock of Works division scrap and off-cuts have been brought
into account as on March 31, 2010 in accordance with past practice.
(x) Construction Contracts Disclosure :
* Included in ÃAdvances recoverable in cash or in kind or for value to
be received - considered good - Schedule 10 -Loans & Advances **
Included in Ãdues to customers for contract in progressà - Schedule 11
- Current Liabilities
(xi) (a) The company has recognized in the Profit and Loss account an
amount of Rs.352.07 lakhs ( previous year Rs. 268.57 lakhs) under
defined contribution plans.
(b) The company operates post retirement defined benefit plans as
follows :
a. Unfunded
1. Leave encashment
2. Pension to Directors
3. Farewell Gifts
4. Post Retirement Medical benefits of ex-employees.
b. Funded
1. Gratuity
(c) Details of unfunded retirement defined benefit obligations are as
follows:
(c) Unfunded Post retirement defined benefit obligations (Contd.)
(d) Details of Post Retirement Gratuity Plan except in respect of Port
and Yard Equipment division (P&YE) which is managed independently by
Life Insurance Corporation of India (LIC) are as follows:- *
(d) Details of Post Retirement Gratuity Plan except in respect of Port
and Yard Equipment division (P&YE) which is managed independently by
Life Insurance Corporation of India (LIC) are as follows:- * (Contd.)
# Amount transferred from associate companies Rs. 5.73 lakhs (previous
year Rs.4.22 lakhs)
* The gratuity liability in respect of P&YE division of the Company is
determined based on premiums charged by LIC under the group gratuity
scheme. Expenses recognised in the period as disclosed above excludes
Rs.6.99 lakhs (previous year Rs. 4.18 lakhs) contributions made by P&
YE division to LIC. Amount recognised in the balance sheet as disclosed
above excludes Rs.2.13 lakhs (previous year Rs. 1.53 lakhs) pertaining
to P & YE division. Disclosures pursuant to AS - 15 (revised 2005) have
not been made in respect of the Post retirement Gratuity plan of P&YE
division as details have not been furnished by LIC to the company and
the amounts are not expected to be material.
The basis used to determine overall expected rate of return on assets
and the effect on major categories of plan assets is as follows:
The major portions of the assets are invested in PSU bonds and Special
Deposits. The long term estimate of the expected rate of return on the
fund assets have been arrived at based on the asset allocation and
prevailing yield rates on these asset classes. Assumed rate of return
on assets is expected to vary from year to year reflecting the returns
on matching Government Bonds.
Disclosures pursuant to AS - 15 (revised 2005) have not been made in
respect of Farewell Gifts and Post Retirement Medical Benefits of
ex-employees as the amounts are not expected to be material.
(xii) SEGMENT REPORTING :
Notes :
1. Pursuant to the ÃAccounting Standard on Segment Reporting (AS-17)
notified by the Companies (Accounting Standard) Rules 2006, the Company
has considered`business segment as primary segment for disclosure. The
Company has identified business segments mentioned below as primary
segments :
(i) Products & Services
(ii) Projects & Services
There is no significant difference in the business conditions
prevailing in various states of India, where the Company has its
operation.
Revenue from sales to external customers outside India is less than 10%
of the Companys total revenue. Hence, geographical segment disclosures
are not considered necessary.
2. Unallocated corporate expenditure includes common service expenses.
Unallocable income includes primarily dividend income from investments.
3. Unallocated assets includes investments.
4. Inter-segment revenue are at market driven agreed price.
(xiii) RELATED PARTY DISCLOSURES :
Information relating to Related Party Transactions as per Accounting
Standard 18 notified by the Companies (Accounting Standards) Rules,
2006.
A) List of related Parties and Relationship
Party Relationship
a) TRF Singapore Pte Ltd. Subsidiary
YORK Transport Equipment (Asia) Pte Ltd.
YORK Transport Equipment Pty Ltd.
YORK Sales (Thailand) Co. Ltd Subsidiary - The
YTE Transport Equipment (SA) (Pty) Limited Ownership of which
YORK Transport Equipment (Malaysia) Sdn Bhd is directly or
Rednet Pte Ltd. indirectly through
PT YORK Engineering subsidiary (ies)
Eadda Pte Ltd
YTE Special Products Pte Ltd
Qingdao YTE Special Products Co. Ltd.
YORK Transport Equipment India Pvt. Ltd.
Dutch Lanka Trailer Manufacturers Limited #
Dutch Lanka Engineering Pvt. Ltd. #
Dutch Lanka Trailers LLC #
# w.e.f. August 1, 2009
b) Adithya Automotive Application Pvt. Ltd * Subsidiary
* w.e.f. June 1, 2009
c) Tata Steel Limited Associate - Tata Steel
holds 34.77% of the
voting powers of the
Company
d) Key Management Personnel
Mr. Sudhir Deoras Managing Director
Mr. Ramesh Chander Nandrajog Executive Director
till 31.07.2009
B) Related Party Transaction
C) The Company does not have any transactions that needs to be reported
under clause 32 of the Listing Agreement.
(xiv) DEFERRED TAX (arising out of timing differences)
(xv) Sundry creditors include dues to parties covered under the Micro,
Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at
March 31,2010 (Schedule 11 - Current liabilities) is as under.
(xvi)The Company has not hedged its foreign currency exposures. The
year end foreign currency exposures that have not been hedged by a
derivative instrument or otherwise are given below :
(xvii) Figures for the previous year have been regrouped and restated
wherever necessary.
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TRF Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
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TRF Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
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Stocks To Buy Today, Dec 22: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stocks To Buy Today, Dec 19: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Stocks To Buy Today, Dec 18: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday -
Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
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Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each
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