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Notes to Accounts of TIL Ltd.

Mar 31, 2012

1 CORPORATE MRNHMTMI

The Limited (the company) is engaged in manufacturing of a comprehensive range of material handling lifting port and road construction solutions with integrated customer support and after Sales Service. Overall the Company's products and services are termed as Materials Handling Solutions (MHS). The Company has two manufacturing facilities - Kamarhatty and Kharagpur in West Bengal. The Company is a Public Limited Company and is listed in Bombay, Calcutta and National Stock Exchange in India.

2.1 Rights, Preferences and Restrictions attached to Equity Shares

The Company has one class of Equity Shares having a par value of Rs 10/- per share. Each shareholder is eligible 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 eligible to receive the remaining assets of the Company after distribution of all Preferential amounts, in proportion to their shareholding.

3.1 The above borrowings are secured by a first pari passu charge on all the current assets of the Company (namely Stocks, Bills Receivable and Book Debts) and a second pari passu charge on all movable (excluding such movables as may be agreed by Consortium Bankers from time to time) fixed assets of the Company, both present and future and on certain immovable properties of the Company under a joint deed of hypothecation between the Company and its Consortium Bankers.

4.1 There are no outstanding dues to Micro and Small Enterprises based on information available with the Company.

5.1 Provision for Warranty:

Warranty which hitherto were accounted during the period of incurrence are now accounted for on accrual basis. As a result of this the profit for the year is lower by Rs 70 lacs.

The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise - being typically up to one year.

As per the terms of the contracts, the Company provides post-contract services / warranty support to its customers. The Company accounts for the post-contract support / provision for warranty on the basis of the information available with the Management duly taking into account the current and past technical estimates.

6.1 Based on the valuation report submitted by the valuers appointed for the purpose, certain items of the Company's fixed assets (viz. Freehold and Leasehold Land, Buildings and Plant and Equipment) were revalued on 31st March,1993 after considering the following factors

- The then estimated current market value pertaining to Leasehold Land and Freehold Land and Buildings thereon.

- Value of Plant and Equipment based on their the then current cost of replacement.

- Adjustments for the then condition, the standard of maintenance, depreciation up to valuation date etc.

The resultant revaluation surplus of Rs 2,472 Sacs, arising from the aforesaid revaluation, were transferred to Revaluation Reserve as reflected in the Company's annual accounts for 1992-93.

Depreciation on these revalued assets as calculated in the manner includes an additional charge of Rs 15 lacs (Previous Year Rs 15 lacs) and an amount equivalent to the additional charge has been transferred to the Profit and Loss Account from Revaluation Reserve; The effective depreciation rates (other than for leasehold land) are as per Schedule XIV to the Companies Act, 195B.

6.2 Ownership of a flat (cost Rs 39 lacs) belonging to the Company in a Co-operative Housing Society is registered in the name of the Managing Director of erstwhile Spun dish Engineering Ltd.

6.3 Other adjustments represents borrowing cost capitalized during the year Rs 342 lacs (Previous Year Nil),

6.4 The amount has been de-capitalized on a prudent basis due to certain operational constraint regarding the usage of the land.

6.5 Capital Work in Progress includes borrowing costs Rs 397 lacs (Previous Year Nil).

7.1 Technical Know-how represents technical drawings, designs etc. relating to manufacture of the Company's products acquired pursuant to various agreements conferring the right to manufacture and usage only.

8.1 Employee Benefits

The Company has recognized, in Statement of Profit and Loss for the year ended 31st March, 2012 an amount of Rs 47 lacs (Previous year Rs 37 lacs) as expenses under defined contribution plans.

(A) Provident Fund

The company has an obligation to fund any shortfall on the yield of the trust's investments over the administered interest rates on annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors. Based on the final guidance for measurement of Provident Fund liabilities issued by the Actuarial Society of India, the Company's liability at the year end of Rs 57 lacs has been actuarially determined by an independent authority. The Company has contributed for the year ended 31st March 2012 an amount of Rs 172 lacs (Previous year Rs161 lacs) at Provident Fund.

(B) Superannuation Fund :-

(i) Certain eligible employees of the Company who had attained at least 45 years of age as on 1 st April,2009 are entitled to Superannuation benefit under the Superannuation scheme (a funded Defined Benefit Planundera common Trust- Tractors India Limited Superannuation Fund Scheme', being administered by the trustees of the said fund for the benefit of employees of the Company and its subsidiary company i.e. Tractors India Private Limited). Under the aforesaid benefit scheme the Company makes periodic contribution to the Superannuation Fund Scheme and a predetermined percentage of salary is paid as pension on retirement. The quantum of pension depends on the average basic salary of eligible employee during the last 36 months before retirement. The benefit vests to employees with 12 years of continuous service and attainment of 48 years of age on retirement/death/termination. The most recent actuarial valuation of Plan Assets and Present Value of the Defined Benefit Obligation of Superannuation Fund was carried out as on 31st March,2012,

(ii) Employees who did not attain 45 years of age as on 1st April,2009 are under the purview of 'Defined Contribution Scheme' in respect of service rendered from 1st April,2009. The benefit of services rendered by these employees up to 31st March,2009 come under the purview of 'Defined Benefit Scheme' as indicated which is frozen as on 31st March,2009, Hence for this category of employees, the benefit of cessation of service will be:

a) amount accumulated by annual contribution of 15% of Basic Salary and

b) amount frozen as on 31 st March,2009.

(C) Gratuity Fund :-

The Company makes periodic contributions to the Tractors India Limited Staff Gratuity Fund, a funded defined benefit-plan for qualifying employees administrated under a common Trust by the trustees of the said fund for the benefit of the employees of the Company and its subsidiary company i.e. Tractors India Private Limited,

Under the Gratuity plan, every employee is entitled to gratuity, being higher of the amount, calculated under the Company's plan (based on average salary of last 36 months and number of years of service, restricted to a maximum of 40 years) or calculations as laid down under the Payment of Gratuity Act, 1972. Gratuity is payable on death / retirement / termination and the benefit vests after 5 year of continuous service.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation was carried out as at 31st March, 2012,

8.2 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, State and General Government Securities. Based on the asset allocation and prevailing yield rates on these asset classes, the long term estimate of the expected rate of return on the fund assets have been arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching Government Bonds.

8.3 The estimate of future salary increases take into account inflation, seniority, promotion and other relevant reasons.

9.1 Miscellaneous expenses include charge/(credit) on account of Loss on Foreign Exchange (Net) of Rs 196 lacs (Previous year Gain of Rs 98 lacs)

9.2 The Company has various residential / commercial premises taken under cancellable operating lease. Leases range for periods between 3 to 5 years. Terms of the lease include operating term for renewal, increase in rent for future periods, terms of cancellation etc. The operating lease payments for the year amount to Rs 100 lacs (Previous Year Rs 108 lacs)

9.3 During the year, the Company commenced initial trial run followed by commercial production (in March 2012) at the Kharagpur location. Total capitalization of Rs 8,439 lacs (previous year Nil) against these projects include following trial run expenses (net).

(Rs.in lacs)

10 CONTINGENT LIABILITIES IN RESPECT OF

As at 31.03.2012 As at 31.03.2011

a. Sales Tax Matters under dispute 1,509 369 [Related payments Rs 5 lacs (Previous year Rs 6 lacs)]

b. Income Tax Matters under dispute 303 176

[ Excludes disputed Income Tax matters, in view of favorable Tribunal decision in similar case].

[Related payments Rs 93 lacs (Previous year Rs.48 lacs)]

c. Service Tax matters under dispute 1,213 1,314 [Related payments Rs Nil (Previous year Rs.217 lacs)]

d. Excise Duty matters under dispute 48 85 [Related payments Rs 23 lacs (Previous year Rs 23 lacs)]

The management believes that the 6 27 ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and result of operations.

11.1 Based on legal proceedings initiated by the Employees' Union / Association and the interim order of the Hon'ble Calcutta High Court dated 22nd December, 2006 and 18th April, 2007 restraining the Company from making any contribution / deduction towards Employees' State Insurance in respect of its Kamarhatty ( with effect from October,2006 ) and Taratolla (with effect from March, 2007) units, in respect of employees whose monthly salaries (i.e. basic, dearness allowance and overtime) are between Rs 7,501 and Rs 10,000, no contributions / deductions have been made and deposited with the appropriate authorities. The related amounts involved as on 31st March, 2012 being Employer's Rs 4 lacs (Previous Year Rs 7 lacs) and Employees' Rs 1 lacs (Previous Year Rs 3 lacs),

11.2 Consequent to enhancement of Employees' State Insurance benefit ceiling for 'Employee Wages' from Rs 10,000 to Rs 15,000 per month with effect from 1 st May 2010, legal proceedings have been initiated by the Employees' Union / Association of the Company and an interim order dated 13th August, 2010 has been issued by the Hon'ble Calcutta High Court in this regard, restraining the Company from making contribution / deduction towards Employees' State Insurance in respect of employees whose monthly salaries (i.e. basic, dearness allowance and overtime) are between Rs 10,001 and Rs 15,000. In view of the said Order, the Company has neither deducted from the certain concerned employees nor contributed its own share to the Employees State Insurance Scheme with effect from 1st August 2010, the related amounts involved as on 31 March, 2012 being Employer's Rs 3 lacs (Previous Year Rs 1 lac) and Employees' Rs 1 lac (Previous Year Rs 0.32 lacs).

12 Pursuant to the Scheme of Arrangement (the 'Scheme') under Section 391 to 394 of the Companies Act between the Company i.e. TIL Limited (the transferor Company) and its wholly owned subsidiary Tractors India Private Limited (TIPL) (the transferee company), as sanctioned by the Hon'ble High Court at Kolkata vide order dated 12th July,2010, the undertaking of the Company pertaining to dealership business of Caterpillar (comprising Construction and Mining Solutions and Power System Solutions) has been transferred to and vested in TIPL on a going concern basis with effect from the appointed date of 1st April, 2010.

The said Scheme has been given effect to in the accounts for the year ended 31st March 2011 in accordance with the said High Court order.

13 In terms of Accounting Standard (AS) 17 on 'Segment Reporting notified in the Companies Act, 1956, Segment information has been presented in the Consolidated Financial Statements [prepared pursuant to Accounting Standard (AS) 21 on 'Consolidated Financial Statements notified in the Companies Act, 1956] included in the annual report for the year.

14 The Revised Schedule VI has become effective from 1st 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 years' classification / disclosure.


Mar 31, 2011

1. Ownership of a flat (cost Rs. 3,937 thousand) belonging to the Company in a Co-operative Housing Society is registered in the name of the Managing Director of erstwhile Spundish Engineering Ltd.

2. Contingent Liabilities in respect of -

(Rs. in 000)

As at 31.03.2011 As at 31.03.2010

2.1 Sales Tax Matters under dispute 36,298 6,546 [Net of payments Rs. 645 thousand (Previous year Rs. 3,243 thousand)]

2.2 Income Tax Matters under dispute 12,790 1,809 [Excludes disputed Income Tax matters, in view of favourable Tribunal decision in similar case.]

2.3 Service Tax matters under dispute [Net of payments Rs. 1,463 thousand (Previous year 9,284 96,261 Rs. 20,208 thousand)]

2.4 Excise Duty matters under dispute 4,315 5,329 [Net of payments Rs. 2,918 thousand (Previous year Rs. 1,648 thousand)]

3.1 Based on legal proceedings initiated by the Employees Union/ Association and the interim order of the Honble Calcutta High Court dated 22nd December,2006 and 18th April,2007 restraining the Company from making any contribution/ deduction towards Employees State Insurance in respect of its Kamarhatty ( with effect from October,2006 ) and Taratolla ( with effect from March, 2007) units, in respect of employees whose monthly salaries (i.e.basic,dearness allowance and overtime ) are between Rs. 7,501 and Rs. 10,000, no contributions/ deductions have been made and deposited with the appropriate authorities. The related amounts involved as on 31st March, 2011 being (Employers) Rs. 679 thousand (Previous Year Rs. 669 thousand) and (Employees) Rs. 250 thousand (Previous Year Rs. 246 thousand).

3.2 Consequent to enhancement of Employees State Insurance benefit ceiling for Employee Wages from Rs. 10,000 to Rs. 15,000 per month with effect from 1st May 2010, legal proceedings have been initiated by the Employees Union/ Association of the Company and an interim order dated 13th August, 2010 has been issued by the Honble Calcutta High Court in this regard, restraining the Company from making contribution/ deduction towards Employees State Insurance in respect of employees whose monthly salaries (i.e. basic, dearness allowance and overtime ) are between Rs. 10,001 and Rs. 15,000. In view of the said Order, the Company has neither deducted from the certain concerned employees nor contributed its own share to the Employees State Insurance Scheme with effect from 1st August, 2010, the related amounts involved as on 31st March, 2011 being (Employers) Rs. 87 thousand (Previous Year NIL) and ( Employees) Rs. 32 thousand (Previous Year NIL).

4. The Company has various residential/ commercial premises taken under cancellable operating lease. Leases range for periods between 3 to 5 years. Terms of the lease include operating term for renewal, increase in rent for future periods, terms of cancellation etc. The operating lease payments for the year amount to Rs. 10,773 thousand (Previous Year Rs. 18,572 thousand).

5. There are no outstanding dues for Micro and Small Enterprises based on information available with the Company.

6. Technical Know-how [ shown under Intangible Assets - Schedule E ] represents technical drawings, designs etc. relating to manufacture of the Companys products acquired pursuant to various agreements conferring the right to manufacture and usage only.

7. Pusuant to the Scheme of Arrangement (the Scheme) under Section 391 to 394 of the Companies Act between the Company i.e. TIL Limited (the transferor Company) and its wholly owned subsidiary Tractors India Private Limited (TIPL) ( the transferee company), as sanctioned by the Honble High Court at Calcutta vide order dated 12th July, 2010, the undertaking of the Company pertaining to dealership business of Caterpillar (comprising Construction and Mining Solutions and Power Systems Solutions) has been transferred to and vested in TIPL on a going concern basis with effect from the appointed date of 1st April, 2010, in consideration of 4489430 number of Equity Shares of TIPL at Rs. 10/- each at a premium of Rs. 203.48 per share fully paid up, amounting to Rs. 958,396 thousand, on a slump sale basis.

8.1 Sales-others [Note 22.2(i) below] represents Service Income Rs. 25,080 thousand (Previous Year Rs. 236,933 thousand).

8.2 Provident Fund :- In terms of the Guidance on implementing Accounting Standard(AS) 15 on Employee Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, a provident fund set up by the Company is treated as a defined benefit plan since the Company is obligated to meet interest shortfall, if any. However, at the year end, no shortfall remains unprovided for. The Actuary has expressed his inability to provide an actuarial valuation of the provident fund liability as at the year end in the absence of any guidance from the Actuarial Society of India. Accordingly, complete information required to be considered as per AS 15 in this regard are not available and the same could not be disclosed. During the year, the Company has contributed Rs. 11,798 thousand (Previous year Rs. 17,974 thousand) to the Provident Funds.

8.3 A) Superannuation Fund :-

(i) Certain eligible employees of the Company who had attained at least 45 years of age as on 1st April, 2009 are entitled to Superannuation benefit under the Superannuation scheme (a funded Defined Benefit Plan under a common Trust- Tractors India Limited Superannuatiion Fund Scheme, being administered by the trustees of the said fund for the benefit of employees of the Company and its subsidiary company i.e. Tractors India Private Limited). Under the aforesaid benefit scheme the Company makes periodic contribution to the Superannuation Fund Scheme and a predetermined percentage of salary is paid as pension on retirement. The quantum of pension depends on the average basic salary of eligible employee during the last 36 months before retirement. The benefit vests to employees with 12 years of continious service and attainment of 48 years of age on retirement/death/termination. The most recent actuarial valuation of Plan Assets and Present Value of the Defined Benefit Obligation of Superannuation Fund was carried out as on 31st March,2011.

(ii) Employees who did not attain 45 years of age as on 1st April,2009 are under the purview of Defined Contribution Scheme in respect of service rendered from 1st April, 2009. The benefit of services rendered by these employees upto 31st March, 2009 come under the purview of Defined Benefit Scheme as indicated in Note 18.3 (i) above, which is frozen as on 31st March, 2009. Hence for this category of employees, the benefit of cessation of service will be:

a) amount accumulated by annual contribution of 15% of Basic Salary and

b) amount frozen as on 31st March, 2009.

B) Gratuity Fund :- The Company makes periodic contributions to the Tractors India Limited Staff Gratuity Fund, a funded defined benefit-plan for qualifying employees administrated under a common Trust by the trustees of the said fund for the benefit of the employees of the Company and its subsidiary company i.e. Tractors India Private Limited.

Under the Gratuity plan, every employee is entitled to gratuity, being higher of the amount, calculated under the Companys plan (based on average salary of last 36 months and number of years of service, restricted to a maxmimum of 40 years) or calculations as laid down under the Payment of Gratuity Act, 1972. Gratuity is payable on death/ retirement/ termination and the benefit vests after 5 year of continuous service.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation was carried out as at 31st March, 2011.

8.4 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. Based on the asset allocation and prevailing yield rates on these asset classes, the long term estimate of the expected rate of return on the fund assets have been arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching Government Bonds.

8.5 The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant reasons.

8.6 In respect of the Companys Defined Benefit plans pertaining to Gratuity and Superannuation benefit schemes for employees transferred to TIPL in terms of the Scheme of Arrangement, as indicated in Note 13 above, the present value of obligation as on 1st April, 2010 have been worked out by an independent actuary based on relevant information related to each such employees.

The fair value of plan assets pertaining to the Company as on 1st April, 2010 in respect of Gratuity and Superannuation benefit scheme funds, being maintained by Tractors India Limited Staff Gratuity Fund and Tractors India Limited Superannuation Fund respectively have been bifurcated by the Trustees of the related funds in proportion to the present value of the obligation as determined by the independent actuary as referred above.

9. In terms of Accounting Standard (AS) 17 on Segment Reporting notified in the Companies Act, 1956, Segment information has been presented in the Consolidated Financial Statement [prepared persuant to Accounting Standard (AS) 21 on Consolidated Financial Statement notified in the Companies Act, 1956] included in the annual report for the year.

10. Related Party Disclosure in keeping with Accounting Standard 18 on "Related Party Disclosures". A) List of Related Parties

Subsidiaries Myanmar Tractors Limited

Tractors Nepal Private Limited

TIL Overseas Pte. Limited

Tractors India Private Limited Key Management Personnel Mr. A. Mazumdar( Chairman and Whole time Director)

Mr. S. Mazumder( Vice Chairman & Managing Director)

Mr. S K Bhatnagar( Whole time Director - Appointed w.e.f. 1st April, 2010) With the exception of Cranes/ Carrier Units ( Trucks), Earthmoving Equipment,Diesel Generating Sets and Self-Propelled Rubber Tyred Container Handling Mobile Crane mentioned above ,none of the items included in the above classes of goods exceeded individually 10% of the total value of Purchases, Stock or Turnover and accordingly quantitative information has not been provided for.

11. The figures for the current year are not comparable with those of the previous year (which have been rearranged/regrouped wherever necessary),as the figures for the previous year include transactions relating to the transferred undertaking pertaining to dealership business of Caterpillar, as referred to in Note 13.


Mar 31, 2010

1. Based on the valuation report submitted by the valuers appointed for the purpose, certain items of the Companys fixed assets (viz. Freehold and Leasehold Land, Freehold and Leasehold Buildings and Plant and Machinery) were revalued on 31st March,1993 after considering the following factors :-

- The then estimated current market value pertaining to Leasehold Land and Freehold Land and Buildings thereon.

- Value of Plant and Machinery based on their the then current cost of replacement.

Adjustments for the then condition, the standard of maintenance, depreciation up to valuation date etc. The resultant revaluation surplus of Rs. 247,234 thousand arising from the aforesaid revaluation were transferred to Revaluation Reserve as reflected in the Companys annual accounts for 1992-93.

Depreciation on these revalued assets as calculated in the manner indicated in Note 2.3(b) above includes an additional charge of Rs. 1,545 thousand (Previous Year Rs. 1,545 thousand)and an amount equivalent to the additional charge has been transferred to the Profit and Loss Account from Revaluation Reserve; such transfer, according to an authoritative professional view being acceptable for the purpose of the Companys annual accounts. In consequence, the effective depreciation rates (other than leasehold land) are as per Schedule XIV to the Companies Act, 1956.

2. Ownership of a flat (cost Rs. 3,937 thousand) belonging to the Company in a Co-operative Housing Society is registered in the name of the Managing Director of erstwhile Spundish Engineering Ltd.

3. Contingent Liabilities in respect of (Rs. 000)

As at 31.03.2010 As at 31.03.2009

3.1 Sales Tax Matters under dispute 6,546 4,046 [Net of payments Rs. 3,243 thousand (Previous year Rs. 300 thousand)]

3.2 Income Tax Matters under dispute 1809* 2028* * Excludes disputed Income Tax matters, in view of favourable Tribunal decision in similar case.

3.3 [Service Tax matters under dispute 96,261 12,056 [Net of payments Rs. 20,208 thousand (Previous year Rs. 9,807 thousand)]

3.4 Excise Duty matters under dispute , 5,329 8,507 [Net of payments Rs. 1,648 thousand (Previous year Rs. 1,648 thousand)]

4. Guarantees

4.1 Bank Guarantees Majrjding 337,816 361,545

4.2 Corporate Guarantee given behalf of Overseas sjdjajies Limit 298,980 307,308

Amount outstanding at year-end Nil Nil year Rs. 20,358 thousand)] 18,566 57,960

5. Based on legal proceedings initiated by the Employees Union/ Association and the interim order of the Honble Calcutta High Court dated 22nd December, 2006 and 18th April, 2007 restraining the Company from making any contribution/ deduction towards Employees State Insurance in respect of its Kamarhatty (with effect from October 2006) and Taratolla (with effect from March 2007) units, in respect of employees whose monthly salaries (i.e. basic, dearness allowance and overtime) are between Rs. 7,501 and Rs. 10,000, no contributions/ deductions have been made and deposited with the appropriate authorities. The related amounts involved as on 31st March, 2010 being (Employers) Rs. 669 thousand (Previous Year Rs. 568 thousand) and (Employees) Rs. 246 thousand (Previous year Rs. 209 thousand).

5.1 The Company has taken various residential/commercial premises under cancellable operating lease. Leases range for periods between 3 to 5 years. Terms of the lease include operating term for renewal, increase in rent for future periods, terms of cancellation etc. The operating lease payments for the year amount to Rs. 18,572 thousand (Previous year Rs. 11,811 thousand).

5.2 The Company has given various Plant and Machinery (namely Diesel Generating Sets, Machines etc.) under cancellable operating leases. Leases range for periods between 6 months to 3 years. Terms of lease include terms for renewal, cancellation etc. Initial Direct costs (commissioning, installation etc.) for such assets are borne by the lessee, other than transportation cost, which is borne by the Company and charged off to revenue. Lease rentals recognised as income during the year Rs. 188,735 thousand (Previous Year Rs. 130,528 thousand). Other details for such Plant and Machinery are as below.

6 There are no outstanding dues for micro and small enterprises based on information available with the Company.

7 Technical Know-how [shown under Intangible Assets - Schedule E] represents technical drawings, designs etc. relating to manufacture of the Companys products and acquired pursuant to various agreements conferring the right to manufacture and usage only.

8 The Company has certain long-term composite maintenance contracts with a party which entails, inter alia, supply of spare parts. The billing/payment schedule is time phased. Pending supply of spare parts, related amount of Rs. 17,078 thousand (Previous year Rs. 9,519 thousand) billed during the year as per the payment schedule of the aforesaid contract, has been considered as liability and the related sales will be recognised on supply of spares, as and when required, under the said contracts, in future in keeping with the accounting policies set out in Note 2.1 above. During the year an amount of Rs. 95,005 thousand (Previous year Rs. 11,629 thousand) has been released from the accumulated liabilities in this regard on a prudent basis and adjusted against related contractual dues.

9 Sales-others [Note 23.2(g) below] include Service Income Rs. 236,933 thousand (Previous Year Rs. 161,467 thousand).

9.1 Excise Duty is net of Nil (Previous Year Rs. 15,185 thousand) on account of accrued duty benefit for the year pertaining to Export/ Deemed Exports.

10. The Company had allotted on 28th December, 2007,on a preferential basis, to the Indian promoter group and certain other companies/ entities/ persons 2,993,842 number of Convertible Equity Warrants against receipt of 10% of the consideration of Rs. 326/- per Warrant, determined in keeping with the related Securities and Exchange Board of India (SEBI) Guidelines. Each Warrant was convertible into one equity Share of nominal value of Rs. 10/- each at a price of Rs. 326/- per share in lots at the option of the warrant holders within eighteen months from the date of allotment in accordance with relevant SEBI Guidelines and the terms of the issue, upon payment of balance consideration by the warrant holders.

Out of the said 2,993,842 number of convertible Equity Warrants, the Company upon realisation of balance consideration and exercise of conversion option by certain warrant holders (out of the Indian Promoter Group), issued and allotted in March, 2008,300,135 number of Equity Shares of Rs. 10/- each at a premium of Rs. 316/- per share against conversion of equivalent number of Equity Warrants.

The stipulated period to exercise the option by aliotees of remaining 2,693,707 number of convertible Equity Warrants expired during the current year and accordingly the said Equity Warrants were forfeited and the10% of the consideration amount received against such allotment amounting to Rs. 87,815 thousand has been forfeited and credited to Capital Reserve Account.

10.2 Provident Fund :-

In terms of the Guidance on implementing Accounting Standard (AS) 15 on Employee Benefits issued by the Accounting Standards Board of the Institute of Chartered Accountants on India, a provident fund set up by the Company is treated as a defined benefit plan since the Company is obligated to meet interest shortfall, if any. However, at the year end, no shortfall remains unprovided for. The Actuary has expressed his inability to provide an actuarial valuation of the provident fund liability as at the year end in the absence of any guidance from the Actuarial Society of India. Accordingly, complete information required to be considered as per AS 15 in this regard are not available and the same could not be disclosed. During the year, the Company has contributed Rs. 17,974 thousand (Previous year Rs. 15,334 thousand) to the Provident Funds.

10.3 A. Superannuation Fund :-

Up to 31st March, 2009 all eligible employees of the Company were entitled to Superannuation under the Companys Superannuation Scheme (a defined benefit plan). Under the aforesaid scheme, the Company makes periodic contribution to the Tractors India Limited Super annuation Funds Scheme (a funded defined benefit plan) and a predetermined percentage of salary is paid as pension on retirement. The quantum of pension depends on the average basic salary of the eligible employee during the last thirty six months before retirement. The benefit vest to employees with twelve year of continuous service and attainment of forty eight years of age on retirement/ death/ termination.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation of superannuation fund were carried out as on 31st March, 2010. However with effect from 1st April, 2009 the Board of Trustees of the Fund with the consent of the Companys Management has amended the aforesaid Superannuation Scheme as follows:

(i) Members who have attained at least 45 years of age as on 1st April, 2009 would continue to remain under the purview of the Defined Benefit Scheme.

(ii) Members who have not attained 45 years of age as on 1st April, 2009 will come under the purview of Defined Contribution Scheme in respect of services rendered with effect from 1st April, 2009. The benefit of services rendered till 31st March, 2009 under the Defined Benefit Scheme based on pensionable salary as on 31st March, 2009 will be frozen. Thus for this category of employees, the benefit on cessation of service will be (a) Amount accumulated by annual contribution at 15% of basic salary and (b) amount frozen as on 31 st March, 2009. In view of the aforesaid change the charge for the year in respect of superannuation scheme is lower by Rs.17,109 thousand with corresponding favourable impact on the profit before tax for the year.

B. Gratuity Fund :-

The Company makes periodic contributions to the Tractors India Limited Staff Gratuity Fund, a funded defined benefit-plan for qualifying employees. Under the Gratuity plan, every employee is entitled to gratuity, being higher of the amount, calculated under the Companys plan (based on last drawn salary and year of service) or calculations as laid down under the Payment of Gratuity Act, 1972. Gratuity is payable on death/ retirement/ termination and the benefit vests after 5 years of continuous service.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out as at 31st March, 2010.

11. 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. Based on the asset allocation and prevailing yield rates on these asset classes, the long term estimate of the expected rate of return on the fund assets have been arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching Government Bonds.

11.1 The estimate of future salary increases take into account inflation, seniority, promotion and other relevant reasons.

12. Information given in accordance with the requirements of Accounting Standard 17 on "Segment Reporting" :-

The Companys business segments are organised on product lines as follows:

Material Handling Solutions (MHS) - engaged in manufacturing and marketing of various Material Handling Equipment namely Mobile Cranes, Port Equipment (Reach stacker, Level Luffing Cranes), Self Loading Truck Cranes etc. and dealing in spares and providing services to related equipment.

Construction & Mining Solutions (CMS) - engaged as a dealer for Caterpillar Iric. USA for their earthmoving, construction mining equipments, spares etc. and providing related services in Eastern and Northern India and Bhutan.

Power Systems Solutions (PSS) - engaged in assembly, supply, erection and commissioning of Generating Sets powered by Caterpillar engines and dealing in spares and providing related services in Eastern and Northern India and Bhutan.

Other represents all unallocated expenditure and includes expenses incurred on common services provided to the segments which are not directly identifiable to the individual segments as well as expenses incurred at the corporate level which relate to the Company as a whole.

There has been no inter segment revenue during the year.

The Company operates predominantly within the geographical limits of India, accordingly secondary segments have not been considered.

13. Related Party Disclosure in keeping with Accounting Standard 18 on "Related Party Disclosures":-

a) List of Related Parties

Subsidiaries Myanmar Tractors Limited

Tractors Nepal Private Limited TIL Overseas Pte. Limited Tractors India Private Limited

Key Management Personnel Mr. A. Mazumdar (Chairman and Whole time Director)

Mr. S. Mazumder (Vice Chairman & Managing Director)

14. The Board of Directors has approved a Scheme of Arrangement under Sections 391 to 394 of the Companies Act for transfer with effect from 1 st April, 2010 of the undertaking of the Company pertaining to dealership business of Caterpillar (comprising Construction and Mining Solutions and Power System Solutions) on a going concern basis to Tractors India Private Limited (TIPL) a wholly owned subsidiary of TIL Limited (in consideration for 44,89,430 nos of equity shares of Rs. 10/- each at a premiun of Rs, 203.48 each of TIPL aggregating to Rs. 958,396 thousand). The aforesaid Scheme of Arrangement has been approved by the Board of Directors of TIPL and by the Shareholders of TIL Limited and final approval from the Honble High Court of Kolkata is pending.

15. Previous years figures have been rearranged/ regrouped wherever necessary.











 
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