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Notes to Accounts of Titagarh Wagons Ltd.

Mar 31, 2017

*** All the units are pledged against the working capital loan taken by Titagarh Singapore Pte Limited

Notes:

(a) Valued at exchange rate prevailing on the date of transaction.

(b) The Compulsorily Comvertible Cumulative Preference Shares are convertible into equity shares on or before August 27, 2022 at par.

(c) The 8% Non Convertible Non Cumulative Redeemable Preference Shares (NCNCRPS) are redeemable within five years from the date of allotment i.e. by June 27, 2019 at par.

(d) The Company has investment in the equity and preference capital aggregating to Rs. 4,042.57 lacs in its wholly owned subsidiary company "Titagarh Capital Private Limited" (TCPL). As at March 31, 2017, being the last audited balance sheet date, the accumulated losses in the books of TCPL is Rs. 1,451.26 lacs. However, certain fixed assets of TCPL, having net block of Rs 1,035.48 lacs representing 887 wagons, are in possession of Indian Railways as lease since 1998 which have significant residual value. Considering the above, the management believes there is no impairment on this investment.

(e) Investments at fair value through statement of profit and loss reflects investment in unquoted equity securities. Refer Note 43 for determination of their fair values.

(f) On March 31, 2016, Rs. 125 lacs was accounted on account of fair valuation of the corporate guarantee given by the Company for the working capital loan obtained by the subsidiary. Subsequently, the Company has started charging commission for the said financial guarantee, including for earlier years, and hence the amount recognized as investment on March 31, 2016 has been adjusted during the year ended March 31, 2017.

a) For terms and conditions relating to related party receivables refer Note 42.

b) Refer Note 16 and 40 for information on trade receivables pledged as security by the Company.

c) Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.

Notes:

(a) Loans and receivables are non-derivative financial assets which generate a fixed or variable interest income for the Company. The carrying value may be affected by changes in the credit risk of the counterparties.

(b) Refer Note 16 and 40 for information on loan and deposits pledged as security by the Company.

(c) Loans to related parties are receivable on demand except loan amounting to Rs.1,731.53 lacs given to Titagarh Wagons AFR, which is receivable in 4 structured annual installments by March 31, 2018.

(a) Derivative instruments at fair value through profit and loss (Foreign exchange forward contracts)

While the Company entered into foreign exchange forward contracts with the intention of reducing the foreign exchange risk of expected sales and purchases, these contracts are not designated in hedge relationships and are measured at fair value through profit or loss.

(b) Refer Note 16 and 40 for information on other financial assets pledged as security by the Company.

Note: During the year ended 31st March 2016, the Company has split its equity shares having face value of Rs 10 each into five equity shares having face value of Rs 2 each pursuant to approval of shareholders obtained through postal ballot on April 13, 2015. The record date for the sub-division was April 24, 2015.

b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- (31st March 2016: Rs. 2/- , 1st April 2015: Rs. 10/-) per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

For the year ended March 31, 2017, the Company has proposed a dividend of Rs. 0.80 per share (March 31, 2016: Re. 0.80 per share and March 31, 2015: Rs. 4/- per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company.

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents legal ownership of shares.

d) Pursuant to the approval of shareholders on April 13, 2015, the Company had issued and alloted 15,089,025 Equity Shares of Rs.2/- each at an issue price of Rs.99.41 per share (including premium of Rs.97.41 per share) aggregating to Rs. 15,000.00 lacs under Qualified Institutional Placement (QIP) in accordance with Chapter VIII-A of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulation 2009, which was completed on July 15, 2015.

e) Shares reserved for issue under Employee Stock Options

During the year, 27,500 equity shares of Rs 2 each were issued and alloted to the eligible employees of the Company under the Employee Stock Option Scheme (ESOP) and listing formalities were duly completed.

For details of shares reserved for issue under ESOP of the Company, please refer note 32.

f) Pursuant to merger of certain subsidiaries (refer note 46), the authorized share capital of the company was enhanced by Rs 8,010 lacs divided into 4,005 lacs shares of Rs 2/- each w.e.f April 1, 2015.

Note - The management has estimated the provisions for pending litigations, claims and demands relating to indirect taxes based on its assessment of probability for these demands crystalising against the Company in due course.

Notes:

a) Cash Credits and Packing credit loan (in foreign currency) are secured by first charge on the Company''s current assets, present and future and by way of collateral charge on fixed assets of the Company, both present and future. All the mortgages and charges created in favour of the above lenders rank pari passu with consortium member banks.

b) Cash credits carry interest at banks''s MCLR plus spread ranging from 1% to 2% p.a and are repayable on demand.

c) Packing credit loan (in foreign currency) carry interest rate ranging from 2.20% to 2.62% p.a and are repayable within six months from the date of drawdown.

d) Relates to merged subsidiaries

The management of Corporated Shipyard Private Limited (wholly owned step down subsidiary merged with effect from 1st April 2015) had provided/written off Rs 1,954.16 lacs in the previous year relating to trade receivables, inventory and other advances / Claims receivable as significant time has elapsed without any recovery / realization in the balances. The said amount has been disclosed as exceptional items.

1 Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

2 Significant accounting judgments, estimates and assumptions

The preparation of the financial statements requires management to make judgments, estimates and assumptions, as described below, that affect the reported amounts and the disclosures.

There is no significant area involving high degree of judgment or complexity.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(a) Employee benefit plans

The cost of the employment benefit plans and their present value are determined using actuarial valuations which involves making various assumptions that may differ from actual developments in the future. For further details refer to Note 31.

(b) Fair value measurement of investments

The fair value of unquoted investments are determined using valuation methods which involves making various assumptions that may differ from actual developments in the future. For further details refer Note 43.

(c) Revenue Recognition

The Company uses the percentage-of-completion method in accounting for its fixed-price contracts. Use of the percentage-of-completion method requires the Company to estimate the total cost to be incurred in order to determine the percentage of completion as on the reporting date. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

(d) Warranty

The Company estimates the provision for warranty based on past trend of sales. As at 31 March 2017, the estimated liability towards warranty amounted to approximately Rs. 184.06 lacs (March 31, 2016: Rs 207.85 lacs, April 1, 2015: Rs 104.72 lacs).

(e) ESOP

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 32.

3 Retirement and other Employee Benefit Plans

The Company has a defined benefit gratuity plan which is unfunded (except for Titagarh Steels unit where it is administered through a trust and funded with a bank through its special deposit scheme with State Bank of Bikaner and Jaipur ). Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972.

The following tables summaries the components of employee benefit expenses recognized in the statement of profit and loss and balance sheet for the Gratuity plans..

The estimate of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employee market.

The Company expects to contribute Rs. 105.98 lacs (Rs 264.05 lacs) to the gratuity fund during 2017-18.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is an unfunded plan.

4 Employee Stock Option Plans (ESOP)

The company provides share-based payment schemes to its employees. The Company has formulated an employee stock option scheme namely ESOP Scheme 2014 during the year ended 31 March 2015.

On 11 September 2014, the shareholders, by way of a special resolution passed at the Annual General Meeting, approved the issue of shares to eligible employees under Employee Stock Option Scheme (Scheme 2014). The scheme has been approved by the authorized Compensation Committee pursuant to a resolution passed at its meeting held on March 4, 2015. According to the Scheme 2014, the employee selected by the ESOS compensation committee from time to time will be entitled to the stock options. The total number of options granted should not exceed 25,00,000 options and will be granted in one or more tranches over a period of 5 years. Each option, when exercised, will be converted into 1 equity share of Rs 2 each fully paid up. During the year, the company has issued the first tranche of stock options amounting to 500,000 options. Other relevant terms of the grant are as below:

The weighted average remaining contractual life for the stock options outstanding as at 31 March 2017 is 1.90 years (31st March 2016: 2.90 years).

The weighted average fair value of stock options granted was Rs 137.90 lacs (31 March 2016: Rs 54.33 lacs). The Monte Carlo valuation model has been used for computing the weighted average fair value considering the following inputs:

The expected life of the stock Option is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

During the year ended the Company recorded an employee compensation expense of Rs 83.57 lacs (Rs. 54.33 lacs) in the Statement of Profit and loss.

5 Leases

Certain office premises and land are obtained by the Company on operating lease. The lease term is for 1-10 years and renewable for further period on mutual consent. These are cancellable by giving a notice period ranging from one month to three months. Lease agreements have price escalation clause and rent is not based on any contingencies. There is no restriction under the lease agreement. There are no subleases.

6 Interest in Joint Ventures

The Company has formed a Joint Venture Company ''Matiere Titagarh Bridges Pvt Ltd'' with Matiere SAS, France on January 2nd, 2017 to carry the business of manufacturing, marketing and selling Matiere panel bridges, unibridges, and other auxiliary products.

b) Titagarh Wagons Limited (TWL), the holding company of Cimmco Limited (Cimmco) owns majority of equity and preference shares, directly or indirectly, in Cimmco Limited. Cimmco has been incurring losses over the last few years due to low volume. The company has given commitment to provide financial support, to the best of its ability, to Cimmco Ltd so as to ensure its business continuity.

c) Titagarh Wagons Limited (TWL), the holding company of Titagarh Agrico Private Limited (TAPL), holding 100% equity shares has issued a comfort letter to RBL Bank Limited for the working capital facility sanctioned by it that it will not reduce its financial interest in TAPL.

In respect of above cases, based on favourable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in the financial statements.

B The Company, has given a put option for a loan obtained by Cimmco limited from ICICI Bank for Rs.4,000 lacs. In terms of the said put option, upon occurrence of any event of default as per the terms of the facility agreement, ICICI bank shall have the right to call upon TWL to pay the entire outstanding within such time as may be prescribed, the outstanding amount as at 31st March 2017 being Rs. 3,142.85 lacs.

38 List of subsidiaries and joint venture of the Company

The Company has following subsidiaries and joint venture for which the Company prepares Consolidated Financial Statements as per Ind AS 110 "Consolidated Financial Statements". Investment in these subsidiaries and Joint ventures has been recognized at.

* Represents cash withdrawals from bank accounts across various locations for petty cash purposes.

7 Assets Pledged as Security for working capital loan availed by the subsidiary companies

The foreign subsidiaries of the Company has been sanctioned with a working capital facility for Rs 15,234.47 lacs (Euro 22 million) during the year which is secured by the following assets of the Company:

First charge on the current assets, both present and future and by way of collateral charge on entire fixed assets (excluding vehicles) of the Company, both present and future. All the mortgages and charges created in favour of the above lenders rank pari passu with consortium working capital bankers.

The Company is in the process of creation of the above security subject to necessary approval of the consortium bankers. The total working capital facility that has been drawn out of the above sanctioned facility as on March 31, 2017 is Rs 8,315.44 lacs (Euro 12 million).

2 Segment Information

The Company is organized into business units based on its products and services and has three reportable segments, as follows

a) Wagons & Coaches - Consists of manufacturing of wagons, coaches, bogies, couplers and crossings as per customer specification.

b) Specialized Equipments & Bridges - Consists of bailey / other modular bridges, nuclear biological shelters and other defence related products

c) Others - Consists of miscellaneous business like heavy earth moving machineries, ship building, etc which comprises of less than 10% revenue on individual basis.

No operating segments have been aggregated to form the above operating segments.

Total revenue includes sale to Indian Railways of Rs 17,882.21 lacs (Rs 15,792.36 lacs) and to Ministry of Defence of Rs 4,523.38 lacs (Rs 601.26 lacs).

Information about operating segments For the year ended 31st March 2017

Notes

a) Terms and conditions of transactions with related parties

The sales / services to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free (except loan given to subsidiaries) and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: INR Nil, 1 April 2015: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Advance against salary to KMP are interest free and are repayable within 1 year.

b) The remuneration to key managerial personnel does not include provisions made for gratuity and leave benefits as they are determined on an actuarial basis for the Company as a whole.

(iv) The fair value of financial assets (except investment classified as FVTPL) and liabilities approximates their carrying value as at balance sheet date.

3 Financial Risk Management Objectives and policies

The Company''s financial liabilities comprise short-term borrowings, capital creditors and trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s financial assets include trade and other receivables, cash and cash equivalents, investment in subsidiaries, loan to subsidiaries and deposits. The Company also holds other investments.

The Company has a Risk Management Committee that ensures that risks are identified, measured and managed in accordance with Risk Management Policy of the Company. The Board of Directors also review these risks and related risk management policy which are summarized below:

I) Market risks

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 two types of risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTPL investments, trade payables, trade receivables, borrowings, loan to foreign subsidiaries, other receivables etc

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities. Such foreign currency exposures are hedged by the Company through use of foreign exchange forward contracts. The Company has a treasury team which monitors the foreign exchange fluctuations on a continuous basis and advises the management of any material adverse effect on the Company.

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in USD and Euro exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company''s exposure to foreign currency changes for all other currencies is not material.

(ii) Equity price risks

Equity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in equity prices (other than those arising from interest rate or foreign exchange rate risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or by factors affecting all similar financial instruments traded in the market.

The Company only invests in the equity shares of the subsidiaries and some of the group companies as part of the Company’s overall business strategy and policy. The Company manages the equity price risk through placing limits on individual and total equity investment in each of the subsidiaries and group companies based on the respective business plan of each of the companies. Reports on the investment portfolio along with the financial performance of the subsidiaries and group companies are submitted to the Company’s management on a regular basis. The Company’s Board of Directors reviews and approves all investment decisions.

The Company’s investment in quoted equity instruments (other than subsidiaries) is not material. For sensitivity analysis of Company''s investments in equity instruments, refer note no 43.

II) Credit risks

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade receivables

Customer credit risk is managed by the respective department subject to Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on credibility of the customers.

Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date on an individual basis. The calculation is based on historical data of credit losses. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 5 as the Company does not hold any collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.

III) Liquidity risks

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of cash credits, bank loans among others.

Maturity profile of Financial liabilities

Maturity profile of all financial liabilities is within one year from the end of balance sheet date

8 Capital Management

The Company''s objective when managing capital (defined as net debt and equity) is to safeguard the Company''s ability to continue as a going concern in order to provide returns to shareholders and benefits for other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Company.

9 The Hon''ble High Court of Calcutta vide order dated 11th July 2016, sanctioned the Scheme of amalgamation of the wholly owned subsidiaries namely Cimco Equity Holdings Private Limited and Titagarh Marine Limited (along with its two wholly owned subsidiary companies i.e. Corporated Shipyard Private Limited and Times Marine Enterprises Private Limited) with Titagarh Wagons Limited pursuant to the provisions of Sections 391 to 394 and other applicable provisions of the Companies Act 1956. The certified true copy of the said order has been received and filed with the Registrar of Companies, West Bengal on 13th July 2016. Since, the appointed date of the Scheme was 1st April 2015, the effect of amalgamation has been considered in the books retrospectively as per the requirements of Ind AS 103 ''Business Combinations''.

The financial information as at and for the corresponding year ended March 31, 2016, has been prepared considering the impact of aforesaid merger with effect from April 01, 2015. The financial statement and other financial information of these subsidiaries were prepared under Previous GAAP. Adjustments have been made to the previously issued financial information prepared in accordance with the Companies (Accounting Standards) Rules, 2006 after considering the effect of the aforesaid order and on transition to Ind AS.

10 First Time Adoption of Ind As

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 April 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

(IV) Footnotes to the reconciliation of Balance Sheet and Equity as at 1st April 2015 and 31st March 2016 and Profit or Loss for the year ended 31 March 2016.

a) Fair value of Property, Plant and Equipment (PPE)

The Company has opted to fair value its property, plant and equipment as on 1st April 2015 (transition date to Ind AS) in terms of exemption given in Ind AS 101 ''First-time Adoption of Indian Accounting Standards''. Consequently, impact of incremental depreciation because of such fair valuation have been accounted for.

b) Investments in equity shares

(i) Under Indian GAAP, all investments in equity shares were measured at cost less provision for other than temporary diminution in the value of investments. As explained in accounting policy in Note 2l (ib) Under Ind AS, investment in shares (other than investment in subsidiaries) are accounted for at fair value. These estimates are based on conditions existing on the respective Balance Sheet date.

(ii) The Company has subscribed to Non cumulative non convertible redeemable preference shares (NCNCRPS) of a subsidiary company, Cimmco Limited. The NCNCRPS have been fair valued as on the date of investment and the difference between the fair value and the carrying value has been take to retained earnings. The company recognizes interest on the said financial asset.

c) Financial Instruments

(i) The Company has issued Corporate Guarantee / Put Option for loans taken by the subsidiary companies. These instruments are accounted for at their respective fair values which were earlier not required to be recognized under Indian GAAP. The company recognizes guarantee income on the said financial asset.

(ii) The Company has given loan to a foreign subsidiary which has been fair valued as per IND AS 109 on the date of loan and the difference between the fair value and the carrying value of the loan has been take to retained earnings.

(iii) The Company has measured and recognized expected credit loss (ECL) on certain receivables as on the date of transition as the management expects such receivables to be collected over a longer period than the usual time required. The Company has discounted the cash flows that it expects to receive at the effective interest rate determined at initial recognition, or an approximation thereof in order to calculate ECL.

(iv) Under Indian GAAP, foreign exchange forward contracts were accounted for based on premium amortization method and no fair valuation was required. However, as per Ind AS all derivatives are measured at fair value and the impact (gain/ loss) of such changes in fair values is recorded in the statement of profit or loss.

d) Dividend

Under Indian GAAP, proposed final dividends including Dividend Distribution Taxes (DDT) are recognized as a liability in the period to which they relate, irrespective of when they are approved. Under Ind AS, such dividend is recognized as a liability when approved by the shareholders.

e) Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

Further, the various transitional adjustments arising on adoption of IND-AS also create temporary differences, deferred tax adjustments whereon are also recognized in Retained earnings, Statement of Profit and Loss or OCI along with the corresponding item of adjustment.

f) Impact of Merger of wholly owned Subsidiaries - Common Control business combination

As mentioned in note no. 46, during the year, the Hon''ble High Court of Calcutta has sanctioned the Scheme of amalgamation of the wholly owned subsidiaries namely Cimco Equity Holdings Private Limited and Titagarh Marine Limited (along with its two wholly owned subsidiary companies i.e. Corporated Shipyard Private Limited and Times Marine Enterprises Limited) with Titagarh Wagons Limited pursuant to the provisions of Sections 391 to 394 and other applicable provisions of the Companies Act 1956. The certified true copy of the said order has been received and filed with the Registrar of Companies, West Bengal on 13th July 2016, thus making the Scheme effective. As all the Transferor Companies were wholly owned subsidiaries of the Company, it is a common control business combination and accordingly accounted for using pooling of interest method with effect from 1st April 2015 i.e. appointed date of the scheme of amalgamation as per Ind AS 103 "Business Combinations".

The financial information as at and for the corresponding year ended March 31, 2016, has been prepared considering the impact of aforesaid merger with effect from April 01, 2015. In view of the brought forward business losses and unabsorbed depreciation of one of the merged subsidiaries now available to the Company, current tax recognized earlier has now been reversed. Also, deferred tax asset on the accumulated brought forward business losses and unabsorbed depreciation of the said merged subsidiary as of 31st March 2016 has been recognized in the books of accounts.

g) Prior Period Items

Under Indian GAAP, prior period errors did not require retrospective restatement of the financial statements. However, Ind AS 8 requires prior period errors to be corrected at the beginning of the earliest prior period presented. Accordingly, following adjustments have been done for the errors relating to the previous year''s:

(i) Certain items of cost included in the capital work in progress/PPE did not meet the definition of cost and certain PPE of merged subsidiaries were not available, hence charged off to retained earnings as on the date of transition / Statement of Profit and Loss of previous year.

(ii) Provision done for certain irrecoverable receivables and inventories of a merged subsidiary, not recognized in earlier years by such subsidiary.

(iii) Provision done for the demand raised by sales tax department on a merged subsidiary, not recognized in earlier years by such subsidiary.

h) Re-classifications

The Company has made following reclassification as per the requirements of Ind-AS:

i) Assets / liabilities which meet / do not meet the definition of financial asset / financial liability have been reclassified from / to other asset / liability respectively.

ii) Re-measurement gain/loss on defined benefit plans are re-classified from statement of profit and loss to OCI.

iii) Excise duty on sale of goods earlier netted off with Sales has been disclosed as a separate item in expenses.

iv) Other reclassifications.

a) Cost of raw material and components sold has been regrouped from other expenses to cost of raw material and components consumed.

b) Trade receivables has been regrouped and classified as non-current and other receivable as on 1st April, 2015.

c) Excise duty on changes on inventory earlier classified in other expenses has been disclosed as a separate item in expenses.

d) Management Fee has been reclassified to revenue from operations from other income

i) Other comprehensive income

IND-AS requires preparation of Statement of Other Comprehensive Income in addition to Statement of Profit and Loss.

j) IND-AS 101 Exemption applied

The Company has adopted following exemptions from retrospective application of certain requirements under IND-AS, as allowed by IND-AS 101 - First-time Adoption of Indian Accounting Standards:

(i) The Company has opted not to apply IND-AS 103 - Business Combinations, to acquistions occurred before 1st April 2015 i.e. date of transition.

(ii) The Company has opted to fair value its property, plant and equipment as on 1st April 2015 (transition date to Ind AS) in terms of exemption given in Ind AS 101 ''First-time Adoption of Indian Accounting Standards'' and considered the same as deemed cost as at 1st April 2015.

(iii) The Company has designated investment in equity instruments (other than investment in subsidiaries) held at 1 April 2015 as FVTPL investments.


Mar 31, 2016

Note: During the year, 2,00,59,069 equity shares of Rs. 10 each were split into 10,02,95,345 equity shares of Rs 2 each pursuant to approval of shareholders obtained through postal ballot on April 13,2015. The record date for the sub-division was April 24,2015.

b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- (Rs. 10/-) per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31,2016, the amount of per share dividend recognized as distribution to equity shareholders is Rs. 0.80/- (Rs. 0.80/-). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents legal ownerships of shares.

e) Pursuant to the approval of shareholders on April 13,2015, the Company has issued and allotted 1,50,89,025 Equity Shares of Rs.2/- each at an issue price of Rs.99.41 per share (including premium ofRs.97.41 per share) aggregating to Rs. 15,000.00 lacs under Qualified Institutional Placement (QIP) in accordance with Chapter VIII-A of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulation 2009, which was completed on July 15, 2015.

Notes:

(a) Valued at exchange rate prevailing on the date of transaction.

(b) The 1% Compulsory Cumulative Convertible Preference Shares (CCCPS) are convertible into equity shares on or before August 27,2022 at par.

(c) The 8% Non Convertible Non Cumulative Redeemable Preference Shares (NCNCRPS) are redeemable within five years from the date of allotment i.e. by June 27, 2019at par.

(d) The optionally fully convertible debentures are convertible into equity shares at the option of the Company on or before March 31,2021 at par.

(e) The net worth as per consolidated financial statement of Titagarh Marine Limited (TML) is fully eroded as at March 31, 2016 and the share holder''s funds stood at negative Rs 3111.80 lacs. In view of pending adjustments in the books of accounts pursuant to the Scheme of Amalgamation as referred in note 40, the Company has not made provision against investment in equity shares and 0.1% Optionally Fully Convertible Debentures and loan given to TML amounting to Rs 455.06 lacs, Rs 3,166.50 lacs and Rs 890.93 lacs respectively.

(f) The Company has investment in the equity and preference capital aggregating to Rs. 4,042.57 lacs in its wholly owned subsidiary company "Titagarh Capital Private Limited" (TCPL). As at March 31,2016, being the last audited balance sheet date, the accumulated losses in the books of TCPL is Rs.1,433.40 lacs. However, certain fixed assets of TCPL having net block of Rs 1,035.48 lacs representing 887 wagons, are in possession of Indian Railways as lease since 1998 which have significant residual value. Considering the above, the Company is of the view that the diminution in the value of investment is temporary in nature and accordingly, no provision is considered necessary in these financial statements.

(g) The Company has investment of Rs.6,500 lacs in equity in a Subsidiary "Cimco Equity Holdings Private Limited" (CEHPL). As at March 31,2016, being the last audited balance sheet date, the accumulated losses in the books of CEHPL is Rs. 2,145.14lacs. However, CEHPL is holding certain long term investments in equity shares of Rs. 4,402.70 lacs in its listed subsidiary Company "Cimmco Ltd". Considering the market value of the quoted equity shares, fair value of the freehold and leasehold land and long term business plan and profitability projection of Cimmco Limited, the Company is of the view that the diminution in the value of investment is temporary in nature and accordingly, no provision is considered necessary in these financial statements.

(h) During the year, the Company along with its wholly owned subsidiary company Titagarh Singapore Pte Limited have formed a subsidiary company in Italy in the name of Titagarh Fireman Adler SpA (TFA).TFA has acquired the business and assets of Firema Trasporti SpA, a designer and manufacturer of metro coaches and semi / high speed trains.

Note: The shareholders of the Company have approved the split of each equity share having a face value of Rs 10 into five equity shares having a face value of Rs 2 each through postal ballot on April 13, 2015. The record date for the sub-division was April 24, 2015. Accordingly, the earnings per share for previous year has been adjusted with respect to the aforesaid increase in number of equity shares.

RETIREMENT AND OTHER EMPLOYEE BENEFIT PLANS_

The Company has a defined benefit gratuity plan which is unfunded (except for Titagarh Steels unit where it is administered through a trust and partly funded with a special deposit scheme with State Bank of Bikaner and Jaipur). Every employee who has completed five years or more of service is entitled to gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972.

The following tables summaries the components of employee benefit expenses recognized in the statement of profit and loss and balance sheet for the Gratuity plans.

1. The Board of Directors of the Company at its meeting held on September 24,2015 have approved a Scheme of Amalgamation of its wholly owned subsidiaries namely Cimco Equity Holdings Private Limited and Titagarh Marine Limited (along with its two wholly owned subsidiary companies Corporate Shipyard Private Limited and Times Marine Enterprises Private Limited) with Titagarh Wagons Limited pursuant to the provisions of Sections 391 to 394 and other applicable provisions of the Companies Act 1956. The Hon''ble High Court has sanctioned the aforesaid scheme of amalgamation, however the certified true copy of the said order has been applied for and the scheme of amalgamation will be made effective upon filing of the same with Registrar of Companies, West Bengal, pending which, no adjustment has been made in these accounts.

2. Pursuant to a favorable arbitration award received during the year in relation to a disputed claim against a customer, the Company has recognized the income of Rs 835.44 lacs (including interest of Rs. 225.00 lacs) in these financial statements. The said money has also been received.

3. Excise Duty & Cess on stocks represents differential excise duty and cess on opening and closing stock of finished goods, work in progress and saleable scrap.

4. Previous year''s figures including those given in brackets have been regrouped/reclassified, where necessary, to conform to the current year''s classification.


Mar 31, 2015

L] CORPORATE INFORMATION

Titagarh Wagons Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 and existing under Companies Act 2013. Its shares are listed on Bombay Stock Exchange and National Stock Exchange. The Company is engaged in the manufacturing and selling of Railway Wagons, Steel Castings, Heavy Earthmoving and mining equipments, Bailey Bridges, EMU etc. The Company primarily caters to the domestic market.

2) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2015, the amount of dividend per share recognised as distributable to equity shareholders is Rs. 4/- (Rs.4/-).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

A) The shareholders of the Company have approved the sub-division of each equity shares having a face value ofRs10 into five equity shares having a face value of Rs 2 each through postal ballot on April 13, 2015. The record date for the sub-division has been fixed as April 24, 2015.

(B) Represents loss on disposal of fixed assets adjusted against revaluation reserve in terms of the accounting policy 2(b)(ii).

(C) Effective from April 1,2014, the Company has charged depreciation based on the revised remaining useful lives of the fixed assets as per the requirement of Schdule II to the Companies Act, 2013. Further, as per the transitional provision provided in Note 7(b) of Schedule II, an amount of Rs. 271.22 lacs (net of deferred tax of Rs 139.66 lacs) has been adjusted with general reserve for the fixed assets in respect of which the remaining useful life was Nil as on April 1, 2014.

* The classification of provisions for employee benefits into current / non current have been done by the actuary of the Company based upon estimated amount of cash outflow during the next twelve months from the balance sheet date.

D) Cash Credits and Buyers' Credit are secured by first charge on the Company's current assets, present and future and by way of collateral charge on fixed assets of the Company, both present and future. All the mortgages and charges created in favour of the above lenders rank pari passu with consortium member banks.

E) Cash credits carry interest at base rate ranging from 9.70% to 11.00% plus spread ranging between 0.25% to 2.50% p.a. and are repayable on demand.

F) Buyers' Credit carries interest at Libor plus spread ranging between 0.79% to 1.13% and is repayable by December, 2015.

(a) Valued at exchange rate prevailing on the date of transaction.

(b) Cease to be a subsidiary w.e.f February 18, 2015.

(c) The preference shares are convertible into equity shares on or before August 27, 2022 at par.

(d) The preference shares are redeemable within five years from the date of allotment i.e. by June 27, 2019at par.

(e) The optionally fully convertible debentures are convertible into equity shares at the option of the Company on or before March 31, 2021 at par.

(f) As at the balance sheet date, the Company has total investment of Rs 455.06 lacs in the equity shares and Rs, 3,166.50 lacs in the Optionally fully convertible debentures (OFCD) in Titagarh Marine Limited (TML), its wholly owned subsidiary Company. As at March 31, 2014, being the last audited balance sheet date, the accumulated losses in the books of TML is Rs. 285.76 lacs. Considering the long term business plan and profitability projection, the Company is of the view that the diminution in the value of investment is temporary in nature and accordingly, no provision is considered necessary in these financial statements.

(g) The Company has investment in the equity and preference capital aggregating to Rs. 4,042.57 lacs in its wholly owned subsidiary company Titagarh Capital Private Limited" (TCPL). As at March 31, 2014, being the last audited balance sheet date, the accumulated losses in the books of TCPL is Rs. 1,290.66 lacs. However, certain fixed assets of TCPL having net block of Rs. 59.23 lacs represents 687 wagons, are in possession of Indian Railways as lease since 1998 which have significant residual value. Considering the above, the Company is of the view that the diminution in the value of investment is temporary in nature and accordingly, no provision is considered necessary in these financial statements.

(h) The Company had investment of Rs.50 lacs in equity and Rs.6400 lacs in Optionally Fully Convertible Debentures (OFCD) in a Joint Venture Company Cimco Equity Holdings Private Limited"" (CEHPL). On 15th April 2014, the Company has exercised its option for the conversion of such OFCD into equity shares at par and consequently the Company's holding in CEHPL increased to99.23%.On April 16, 2014,the Company purchased 5,00,000 equity shares of Rs.10/- each held by the other shareholder in CEHPL thereby acquiring 100% equity stake. As a result thereof, CEHPL has become wholly owned subsidiary of the Company w.e.f April 16, 2014. CEHPL hold s.74.76% of the total equity capital of Cimmco Limited (Cimmco) and there fore Cimmco has become a step down subsidiary of the Company on and from April 16, 2014. Further,thesaid conversion of OFCD triggered mandatory Open Offer pursuant to the SEBI (Substantial Acquisition &Takeovers) Regulations, 1997 in which 1429 equity shares (0.007% of Cimmco's equity capital) have been tendered post transfer whereof CEHPL's shareholding in Cimmco has increased to 74.77%.

As at March 31, 2014, being the last audited balance sheet date, the accumulated losses in the books of CEHPL is Rs. 2,129.77 lacs. However, CEHPL is holding certain long term investments in equity shares of Rs. 4,313.35 lacs in its listed subsidiary company Cimmco Ltd. Considering the market value of the quoted equity shares, fair value of the freehold and leasehold land and long term business plan and profitability projection of Cimmco Limited, the Company is of the view that the diminution in the value of investment is temporary in nature and accordingly, no provision is considered necessary in these financial statements.

i) The consumption figures shown above are after adjusting excess and shortages, if any, on physical count, unserviceable items, etc. and net off discount received on purchases. Further the above does not include materials received from customers on free supply basis.

j) It is not practicable to furnish further details in view of the large number of items which differ in size and nature, each being less than 10% in value of the total consumption.

3. During the year, the Company has entered into a contract with Indian Railways for supply of wagons. Due to the low volume of procurement by Indian Railways and the resultant intense unhealthy competition, the pricing of the wagon as finalised by the Indian Railway is un-remunerative and is likely to result in loss on execution of this contract over a period of time. Consequently, the Company has recognised loss of Rs. 1,710.15 lacs during the year on such onerous contract in terms of Accounting Standard 29- Provisions, Contingent Liabilities and Contingent Assets and disclosed it as exceptional item.

4. RETIREMENT AND OTHER EMPLOYEE BENEFIT PLANS

The Company has a defined benefit gratuity plan which is unfunded (except for Titagarh Steels unit where it is administered through a trust and funded with Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy). Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972.

The estimate of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employee market.

The Company expects to contribute Rs. 126.11 lacs (Rs. 73.45 lacs) to the gratuity fund during 2015-16.

5. LEASES

The Company has operating leases for office premises and land that are renewable on a periodic basis and are cancellable by giving a notice period ranging from one month to three months. There is no escalation clause and restriction under the lease agreement. There are no subleases.

6. SEGMENT INFORMATION

Based on the synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company has identified two business segments i.e."Wagons&Coachesand"Others" :

a) Wagons & Coaches - Consists of manufacturing of wagons, coaches, bogies, couplers and crossings as per customer specification.

b) Others - Consists of miscellaneous business like heavy earth moving machineries, bailey bridge etc. which comprises of less than 10% revenue on individual basis.

Export Segment assets consist of export debtors whose balance is less than 10% of total assets of the business segment and hence not disclosed as per Accounting Standard 17. Since the Company has all fixed assets in India only, separate figures for fixed assets/additions to fixed assets for Domestic and Overseas segments are not furnished.

7. CONTINGENT LIABILITIES

A. Disputed claims contested by the Company and pending at various courts/arbitration 930.27 1,072.24

Customer's Claims (Liquidated Damages) - 442.29 Matters under appeal with:

Sales tax authorities 819.00 427.79

Income tax authorities 535.79 711.54

Customs and excise authorities 11,015.15 10,652.68

Letter of Credit and Bank Guarantees outstanding 19,046.84 12,871.03

Corporate Guaranteegiven/fixed deposit pledged on behalf of a subsidiary Company for working capital limits sanctioned to the subsidiary company 7,426.14 8,433.14

Custom Duty on import of equipments and spare parts under EPCG-scheme 981.00 1,077.24

40,754.20 35,687.95

In respect of above cases, based on favourable decisions in similar cases/legal opinions taken by theCompany/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in the financial statements.

B. During the year, Cimmco Limited, a subsidiary company has obtained a loan from ICICI bank for Rs. 4000 lacs which is backed by a "Put Option" of Titagarh Wagons Limited(TWL). In terms of the said put option, upon occurrence of any event of default as per the terms of the facility agreement, ICICI bank shall have the right to call upon TWL to pay the entire outstanding within such time as may be prescribed.

8. The Board of Directors at their meeting dated September 11,2014 has given in-principle approval for the merger of four wholly owned subsidiaries (including step down subsidiaries) namely Titagarh Marine Limited,Cimco Equity Holdings Private Limited, Corporated Shipyard Private Limited and Times Marine Enterprise Private Limited, subject to necessary approvals. The scheme of merger is under preparation.

9. The Shareholders of the Company have approved through postal ballot on April 13, 2015, raising of funds by way of equity shares and / or other securities in accordance with applicable provisions of Companies Act, 2013 and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 for an aggregate amount not exceeding Rs 25,000.00 lacs or equivalent thereof in foreign currency in such manner and on such terms and conditions as may be deemed appropriate by the Board.

10. Excise Duty & Cess on stocks represents differential excise duty and cess on opening and closing stock of finished goods, work in progress and saleable scrap.

11. Previous year's figures including those given in brackets have been regrouped/reclassified, where necessary, to conform to the current year's classification.


Mar 31, 2014

L] CORPORATE INFORMATION

Titagarh Wagons Limited (the Company) is a public company domiciled in India and incorporated underthe provisions ofthe Companies Act, 1956. Its shares are listed at Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. The Company is engaged in the manufacturing and selling of Railway Wagons, Steel Castings, Heavy Earthmoving and mining equipments, Bailey Bridges, EMU etc. The Company primarily caters to the domestic market.

2] LEASES

The Company has operating leases for office premises and land that are renewable on a periodic basis and are cancelable by giving a notice perioc ranging from one month to three months.There is no escalation clause and restriction under the lease agreement. There are no subleases.

3 SEGMENT INFORMATION

Based on the synergies, risks and return associated with business operations and in terms ofAccounting Standard-17, the Company has re-assessed its business segments. The steel foundry division is an integral part of the wagons and coaches division and accordingly reported as one single segment i.e. "Wagons & Coaches". Based on the above re-assessment the current year''s business segments are :

a) Wagons & Coaches - Consists of manufacturing of wagons, coaches, bogies, couplers and crossings as per customer specification.

b) Others - Consists ofmiscellaneous business like heavy earth moving machineries, bailey bridge etc. which comprises ofless than 10% revenue on individual basis.

Export Segment assets consist of export debtors whose balance is less than 10% of total assets of the business segment and hence not disclosed as per Accounting Standard 17. Since the Company has all fixed assets in India only, separate figures for fixed assets/ additions to fixed assets for Domestic and Overseas segments are not furnished.

4] RELATED PARTY DISCLOSURES

Names of related parties and related party relationship Related parties where control exists:

Subsidiary Companies:

Titagarh Singapore Pte Limited Titagarh Capital Private Limited Titagarh Wagons AFR

Greyshamand Co. Private Limited (by virtue of control of composition of the Board of the Company) Titagarh Marine Limited

Titagarh Agrico Private Limited (Formerly Titagarh Cranes Private Limited)

Corporated Shipyard Private Limited (subsidiary of Titagarh Marine Limited)

Joint Venture Companies:

Cimco Equity Holdings Private Limited

Titagarh Freightcar Private Limited (ceased to be a Joint Venture with effect from February 18,2013) Cimmco Limited, subsidiary of Cimco Equity Holdings Private Limited

Associate Companies:

Titagarh Freightcar Private Limited (ceased to be an associate with effect from January 7,2014)

Related parties with whom transactions have taken place during the period:

Key Management Personnel (KMPs):

Mr. J P Chowdhary - Executive Chairman

Mr. Umesh Chowdhary - Vice Chairman & Managing Director

Relatives of KMPs:

Ms. Savitri Devi Chowdhary, Wife of Mr. J P Chowdhary Ms. Rashmi Chowdhary, Wife of Mr. Umesh Chowdhary Ms.Vinita Bajoria, Daughter of Mr. J P Chowdhary Ms.Sumita Kandoi, Daughter of Mr. J P Chowdhary

Enterprises over which KMP/Shareholders/ Relatives have significant influence:

Titagarh Logistics Infrastructure Private Limited Titagarh Capital Management Services Private Limited Traco International Investment Private Limited Titagarh Papers Limited Panihati Rubber Limited

(Rs. in Lacs) As at As at Marc 31, 2014 March 31,2013

5] CONTINGENT LIABILITIES

Disputed claimscontested by the Company and pending atvariouscourts/arbitration 1,072.24 1,155.70

Customer''s Claims (Liquidated Damages) 442.29 442.29

Matters under appeal with:

Sales tax authorities 427.79 348.84

Income tax authorities 711.54 722.97

Customs and excise authorities 10,652.68 9,335.26

Letter of Credit and Bank Guarantees outstanding 12,871.03 21,307.36

Corporate Guaranteegiven on behalf of a subsidiary Company for working 8,257.65 6,954.38

capital limit sanctioned to the subsidiary company

Custom Duty on import ofequipments and spare parts under EPCG-scheme 1,077.24 1,290.21

35,512.46 41,557.01

In respect ofabove cases, based on favourabledecisions in similarcases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in the financial statements.

6. Excise Duty & Cess on stocks represents differential excise duty and cess on opening and closing stock of finished goods, work in progress and saleable scrap.

7. PREVIOUS YEARFIGURES

Previous period''s figures including those given in brackets have been regrouped/reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2013

CORPORATE INFORMATION

Titagarh Wagons Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. The Company is engaged in the manufacturing and selling of Railway Wagons, Steel Castings, Heavy Earthmoving and mining equipments, Bailey Bridges, EMU etc. The Company primarily caters to the domestic market.

1 RETIREMENT AND OTHER EMPLOYEE BENEFIT PLANS The Company has a defined benefit gratuity plan which is unfunded (except for Titagarh Steels unit where it is administered through a trust and funded with Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy). Every employee who has completed five years or more of service is entitled to gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972. The following tables summarises the components of employee benefit expenses recognised in the Statement of Profit and Loss and Balance Sheet for the Gratuity plans.

2 LEASES

The Company has operating leases for office premises and land that are renewable on a periodic basis and are cancelable by giving a notice period ranging from one month to three months.There is no escalation clause and restriction under the lease agreement. There are no subleases.

3 SEGMENT INFORMATIOI

Based on the synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company is engaged in following business segments:

a) Wagons & Coaches - Consists of manufacturing of wagons and coaches as per customer specification

b) Heavy Earth Moving Machineries (HEMM) - Consists of manufacturing of heavy earth moving equipments

c) Steel Foundry - Consists of casting including bogies and couplers

d) Others - Consists of miscellaneous business like bailey bridge etc. are comprising of less than 10% revenue on individual basis

4 RELATED PARTY DISCLOSURES

Names of related parties and related party relationship Related parties where control exists:

Subsidiary Companies: Titagarh Singapore Pte Limited

Titagarh Capital Private Limited

Titagarh Wagons AFR

Greysham and Co. Private Limited (by virtue of control of composition of the Board of the Company)

Titagarh Marine Limited

Titagarh Cranes Private Limited (with effect from August 24,2012) Joint Venture Companies: Cimco Equity Holdings Private Limited

Titagarh FreightCar Private Limited (ceased to be a Joint Venture with effect from February 18,2013)

Cimmco Limited, subsidiary of Cimco Equity Holdings Private Limited AssociateCompanies: Titagarh Freighter Private Limited (with effect from February 19,2013)

Related parties with whom transactions have taken placeduring the period:

Key Management Personnel (KMPs): Mr. J P Chowdhary- Executive Chairman

Mr. Umesh Chowdhary -Vice Chairman & Managing Director Relatives of KMPs: Ms.Savitri Devi Chowdhary, Wife of Mr. J P Chowdhary

Ms. Rashmi Chowdhary, Wife of Mr. Umesh Chowdhary

Ms. VinitaBajoria, Daughter of Mr. J P Chowdhary

Ms.Sumita Kandoi, Daughter of Mr. J PChowdhary Enterprises over which KMP/Shareholders/ Titagarh Logistics Infrastructure Private Limited

Relatives have siqnificant influence Titagarh Capital Management Services Private Limited

5. Traco International Investment Private Limited

Titagarh Papers Limited

Panihati Rubber Limited

The Board of Directors at its meeting held on December 24,2012 had approved a Scheme of Arrangement to demerge the'' Rail Coach Division'' and ''Heavy Earth Moving Machineries''division of the Company by transferring the same on a going concern basis toTitagarh Trains Private Limited and Titagarh Cranes Private Limited respectively with effect from April 1, 2012 subject to approval from respective shareholders and various regulatory authorities. The Board of Directors in its subsequent meeting held on February 18, 2013 has withdrawn the aforesaid Scheme of Arrangement.

6. Excise Duty & Cess on stocks represents differential excise duty and cess on opening and closing stock of finished goods, work in progress and saleable scrap.

7. PREVIOUS YEAR FIGURES

Previous period''s figures including those given in brackets have been regrouped/reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2012

1. Corporate Information

Titagarh Wagons Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and National Stock Exchange. The Company is engaged in the manufacturing and selling of Railway Wagons, Steel Castings, Heavy Earthmoving and mining equipments, Bailey Bridges, EMU etc. The Company primarily caters to the domestic market.

a) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of dividend per share recognised as distributable to equity shareholders is Rs. 8/- (Rs. 8/-)

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

Notes :

a) Cash credit, Packing credit loan and Buyers' credit are secured by first charge on the Company's current assets, present and future and by way of collateral charge on fixed assets of the Company, both present and future. All the mortgages and charges created in favour of the above lenders rank pari passu with consortium member banks.

b) Cash credit carries interest @11% to 14% p.a and are repayable on demand.

c) Packing credit loan carries interest @ Libor 3.5% and is repayable within three months from the balance sheet date.

d) Short term loan carries interest @ 11.75% and is secured by fixed deposits. The loan is repayable within one month from the balance sheet date.

(a) Formerly Flourish Securities and Finance Private Limited

(b) Valued at exchange rate prevailing on the date of transaction

(c) Subsidiary by virtue of the Company's control over the composition of its board of directors.

1. RETIREMENT AND OTHER EMPLOYEE BENEFIT PLANS

The Company has a defined benefit gratuity plan which is unfunded (except for Titagarh Steels unit where it is administered through a trust and funded with Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy). Every employee who has completed five years or more of service is entitled to gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is an unfunded plan.

2. LEASES

The Company has operating leases for office premises and land that are renewable on a periodic basis and are cancelable by giving a notice period ranging from one month to three months. There is no escalation clause and restriction under the lease agreement. There are no subleases.

3. SEGMENTINFORMATION

Based on the synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company is engaged in following business segments.

a) Wagons & Coaches - Consists of manufacturing of wagons and coaches as per customer specification

b) Heavy Earth Moving Machineries (HEMM) - Consists of manufacturing of heavy earth moving equipments

c) Steel Foundry - Consists of foundries casting including bogies and couplers

d) Others - Consists of miscellaneous business comprising of less than 10% revenue on individual basis

As at As at March 31, 2012 March 31, 2011

4. CONTINGENT LIABILITIES

Disputed claims contested by the Company and pending at various courts. 411.09 357.35 Matters under appeal with :

Sales tax authorities 594.47 1035.41

Income tax authorities 871.18 53.68

Customs and excise authorities 8,654.70 2,415.32

Letters of Credit, Bills discounted and Bank Guarantees outstanding 25,232.81 14,018.00

Performance Guarantee given on behalf of a subsidiary Company for fulfillment - 2,031.30 of certain obligations

Put Option granted - 13,000.00

Custom Duty on import of equipments and spare parts under EPCG-scheme - 124.55

5. Excise Duty & Cess on stocks represents differential excise duty and cess on opening and closing stock of finished goods, work in progress and saleable scrap.

6. PREVIOUS YEAR FIGURES

Previous period's figures including those given in brackets have been rearranged where necessary to conform to the current period's classification under Revised Schedule VI as stated in Note 2 above.


Mar 31, 2011

1. Contingent liabilities not provided for in respect of: (Rs. in Lacs)

Sl Particulars As at As at No. March 31, 2011 March 31, 2010

A Disputed claims contested by the Company and pending at various courts. 357.35 311.20

B Matters under appeal with:

Sales Tax Authorities 1,035.41 464.59

Income Tax Authorities 53.68 53.68

Customs and Excise Authorities 2,415.32 1,567.74

C Letters of Credit, Bills discounted and Bank Guarantees outstanding 14,018.00 9,253.33

D Performance Guarantee given on behalf of a subsidiary Company for fulfillment of certain obligations 2,031.30 2,031.30

E Put Option granted (Refer Note No. 24 on Schedule 22) 13,000.00 -

F Custom Duty on import of equipments and spare parts under EPCG-scheme 124.55 246.30

In respect of above cases based on favourable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in the financial statements.

2. Estimated amount of capital commitments (net of advances) remaining to be executed - Rs. 141.77 lacs (Rs. 144.46 lacs).

3. Excise duties on stocks represent differential excise duty on opening & closing stock of finished goods.

4. Working Capital Facilities are secured by hypothecation of stocks, book debts, movable properties of any kind and fixed assets, both present and future and equitable mortgage of immovable properties of the Company and fixed deposits with banks to the extent of Rs. 50.00 lacs.

Short term loans against fixed deposits are secured by pledge of fixed deposits receipts.

5. The Companys application for increase in Gross value of fixed capital Assets by Rs. 78.95 lacs and allowance of sales tax deferment loan aggregating to Rs. 51.72 lacs for the period from January 2005 to March 2005 is pending grant by the relevant authorities. The matter is being pursued by the Company and accordingly, such amount has been included in Sales Tax Deferment loan and shown as Unsecured Loan.

6. During the year, the Company has implemented a new ERP system which required a change in the method of valuation of Raw Materials & Components and Stores & Spare Parts inventories from "First in First out" to "weighted average basis". Further, the management also believes that such change in method of valuation of inventories will result in a more appropriate presentation of these inventories and will give a systematic basis for charge of Raw Materials & Components and Stores & Spare Parts consumption and would be more representative of the time pattern in which the economic benefits will be derived from the use of such inventories. Had the Company continued to use the earlier basis of valuation, the charge to Profit and Loss Account for the year would have been higher by Rs. 18.99 lacs and Raw Materials & Components and Stores & Spare Parts inventories would have been lower by Rs. 39.18 lacs and higher by Rs. 20.19 lacs respectively.

7. Gratuity and other post retirement benefit plans

The Company has a defined benefit gratuity plan which is unfunded (except for Titagarh Steels unit where it is administered through a trust and funded with Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy). Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is also an unfunded plan.

The following tables summaries the components of net benefit/ expense recognised in the Profit and Loss Account and Balance Sheet for the Gratuity plan.

(h) The estimate of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employee market.

(i) The Company expects to contribute Rs. 6.00 lacs to the gratuity fund during 2011-12.

8. Segment Information Business Segments:

Based on the synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company is engaged in following business segments:

a) Wagons & Coaches – Consists of manufacturing of wagons and coaches as per customer specification

b) Heavy Earth Moving Machineries (HEMM) – Consists of manufacturing of heavy earth moving equipments

c) Steel Foundry – Consists of foundries casting including bogies and couplers

d) Others - Consists of miscellaneous business comprising of less than 10% revenue.

Geographical Segments:

The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations.

9. In compliance with Accounting Standard – 18, the disclosures regarding related parties are as follows: I. Name of Related parties:

a) Subsidiary Companies

Titagarh Singapore Pte Limited

Flourish Securities and Finance Private Limited

Titagarh Wagons AFR

Greysham and Co. Private Limited

(by virtue of control of composition of Board of the Company)

b) Associate Companies

Continental Valves Limited (upto 29th July, 2010) Tecalemit Industries Limited (upto 30th June, 2010)

c) Joint Venture Companies

Cimco Equity Holdings Private Limited

Titagarh FreightCar Private Limited

Cimmco Limited, subsidiary of Cimco Equity Holdings Private Limited

(with effect from 14th March, 2010)

d) Key Management Personnel (KMP)

Mr. J P Chowdhary – Executive Chairman

Mr. Umesh Chowdhary – Vice Chairman & Managing Director

(with effect from 1st October, 2010) (Previous Year upto 23rd September, 2009)

e) Relatives of KMP

Ms. Savitri Devi Chowdhary, Wife of Mr. J P Chowdhary Ms. Rashmi Chowdhary, Wife of Mr. Umesh Chowdhary Mr. Umesh Chowdhary, Son of Mr. J P Chowdhary Ms. Vinita Bajoria, Daughter of Mr. J P Chowdhary Ms. Sumita Kandoi, Daughter of Mr. J P Chowdhary

f) Enterprises over which KMP/Shareholders/ Relatives have significant influence

Titagarh Logistics Infrastructures Private Limited

Sourenee Leaves Private Limited

Titagarh Shipyd Limited

Titagarh Capital Management Services Private Limited

Traco International Investment Private Limited

10. Professional Expenses include expenses towards Research and Development Rs. 16.93 lacs (Rs. 8.40 lacs). There is no capital expenditure on account of Research and Development

11. During the year, the Company has issued 1,250,000 convertible equity warrants to its promoter group entity on preferential basis at a resultant price of Rs. 387 each per share (Face value - Rs. 10 each) and has received a sum of Rs. 1,209.38 lacs as advance payment there against. The warrants are convertible into equivalent number of equity shares at the option of warrant holder within 18 months from the date of allotment of the warrants subject to receipt of full consideration.

12. The Company has operating leases for office premises that are renewable on a periodic basis and are cancelable by giving a notice period ranging from one month to three months. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

The amount of rent expenses included in Profit and Loss Account towards operating Leases aggregate to Rs. 46.89 lacs (Rs. 45.41 lacs).

13. The Company has made Investments and given Loans & Advances of Rs. 15,552.72 lacs (Rs. 14,145.38 lacs) to a subsidiary and a joint venture company for the purpose of acquiring controlling stake including certain financial assets like leased wagons of another company, which was registered with the Board for Industrial and Financial Reconstruction (BIFR).

The net worth of the said company has since turned positive and BIFR has also de-registered the company from its purview based on progress of rehabilitation scheme. Since the said company has started operations and has also started making profits, the above amounts are considered good of recovery by the management.

14. As per the rehabilitation scheme sanctioned by Board for Industrial and Financial Reconstruction (BIFR) for Cimmco Limited ("Cimmco"), a related party, the Company has been identified as a "co-promoter" for the successful revival of Cimmco and accordingly the Company has granted an option to a lender of Cimmco for Rs. 13,000.00 lacs, towards credit facilities sanctioned to Cimmco, whereby on occurrence of any of the put option events, the lender has a right to call upon the Company to assume and discharge the receivables of the lender under the said credit facilities.

15. During the year, the Company has set up Titagarh Wagons AFR (formerly, La Compagnie AFR Titagarh), a 90% subsidiary in France to takeover the wagon manufacturing facility of another company in France. The Company has invested Rs. 2,864.60 lacs towards share capital and has also given interest bearing loan of Rs. 3,984.12 lacs to fund the operations of the said Company.

16. Previous periods figures including those given in brackets have been regrouped / rearranged where necessary to conform to this years classification.


Mar 31, 2010

1. Contingent Liabilities:-

i. Claims not acknowledged as debts - 311.20 lacs (Rs. 154.06 Lacs).

ii. Income tax demands under appeal Rs. 53.86 lacs (Rs.37.46 Lacs).

iii.Excise demands under appeal Rs. 1,567.74 lacs (Rs. 1,109.84 Lacs).

iv. Sales tax demands under appeal Rs. 464.59 lacs (Rs. 451.77 Lacs).

v. Outstanding Guarantees and Letters of Credit from Banks Rs. 9,253.33 (Rs. 16,127.32 Lacs) and Performance Guarantee given on behalf of a subsidiary Company for fulfillment of certain obligations Rs. 2,031.30 Lacs (Rs 2,292.75 Lacs).

vi. Future export obligation with respect of duty free import against advance/EPCG licenses Rs. 903.74 Lacs (636.55 Lacs).

2. Estimated amount of Capital contracts not provided for (net of advances) Rs.144.46 Lacs (Rs. 166.26 Lacs).

3. Excise duties on stocks represent differential excise duty on opening & closing stock of finished goods.

4. (a) Working capital borrowings, external commercial borrowings from the bankers and non funded facilities comprising of bank guarantees and letters of credit are secured by hypothecation of stocks, book debts, movable properties of any kind and fixed assets, both present and future and equitable mortgage of immovable properties of the Company and fixed deposits with banks to the extent of Rs.50.00 lacs

(b) Short term loans against fixed deposits are secured by pledge of fixed deposits receipts.

5. The Companys application for increase in Gross value of fixed capital Assets by Rs. 78.95 Lacs and allowance of sale tax deferment loan aggregating to Rs 51.72 Lacs for the period from January 2005 to March 2005 is pending grant by the relevant authorities. The matter is being pursued by the Company and accordingly, such amount has been included in Sales Tax Deferment loan and shown as Unsecured Loan.

6. In compliance with Accounting Standard – 17 – ‘Segment Information notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended) in respect of Business Segment are as follows:

Business Segment:

The business segments based on the Companys products have been identified as "Wagon Building", "Heavy Earth Moving Machineries (HEMM)" and "Steel Foundry".

Wagon Building: Consists of manufacturing of wagons as per customers specification Heavy earth moving Machineries: Consists of manufacturing of earth moving equipments.

Steel Foundry: Consists of foundry castings including Bogies and Couplers.

Others: Consists of miscellaneous business comprising of less than 10% revenue.

Geographical Segment

The Company primarily operates in India and therefore the analysis of geographical segment is not applicable to the Company.

7. The Company has operating leases for office premises that are renewable on a periodic basis and are cancelable by giving a notice period ranging from one month to three months. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.The amount of rent expenses included in Profit and Loss Account towards operating Leases aggregate to Rs 45.41 Lacs (Rs. 33.93 Lacs).

8. (a) Based on the latest audited financial statements as at June 30, 2009 of Titagarh Paper Limited, there is a diminution in the value of investments to the extent of Rs. 329.03 lacs. However considering the strategic nature of these investment and also because the exact realizable value of the assets held by the aforesaid Company is likely to be significantly higher than the book value, no provision towards diminution, other than temporary in nature, in the value of investment is considered necessary.

(b) Debts amounting to Rs. 746.57 lacs recoverable from a customer have not been realized since last year. The Company has taken reasonable steps in the matter and is hopeful to recover these dues. Accordingly, these dues have been considered good of recovery. For the reasons mentioned above, Terminal Excise duty claim of Rs. 195.34 lacs from the Director General of Foreign Trade have also been considered as good of recovery.

9. Export of finished goods out of material imported against Adavnce License amounting to Rs. 1,949.17 lakhs did not take place during the specified period. Accordingly, custom duty of Rs. 623.79 lakhs and interest of Rs.148.05 lakhs thereon has been provided in the books and Rs. 307.61 lakhs (including interest of Rs. 65.73 lakhs) has since been paid as well.

(b) Debts amounting to Rs. 746.57 lacs recoverable from a customer have not been realized since last year. The Company has taken reasonable steps in the matter and is hopeful to recover these dues. Accordingly, these dues have been considered good of recovery. For the reasons mentioned above, Terminal Excise duty claim of Rs. 195.34 lacs from the Director General of Foreign Trade have also been considered as good of recovery.

10. Export of finished goods out of material imported against Adavnce License amounting to Rs. 1,949.17 lakhs did not take place during the specified period. Accordingly, custom duty of Rs. 623.79 lakhs and interest of Rs.148.05 lakhs thereon has been provided in the books and Rs. 307.61 lakhs (including interest of Rs. 65.73 lakhs) has since been paid as well. transferred companies carried on all their businesses and activities for the benefit of and in trust for, the Company from the Appointed Date. Thus, the profit or income accruing or arising to or expenditure or losses arising or incurred by the transferred companies from the Appointed Date are treated as the profit or income or expenditure or loss, as the case may be, of the Company. The Scheme has accordingly been given effect to in these accounts upon filing of certified copy of the Order of the Honble High Court at Calcutta on November 27, 2009 (the Effective Date).

(c) The Company has issued 3,66,954 equity shares of Rs.10/- each aggregating to Rs.36.70 lakhs to the shareholders of TSL on January 16, 2010, while in case of TBPL which was a wholly owned subsidiary of the Company, all the shares held by the Company in TBPL were cancelled and extinguished. (d) A sum of Rs. 1288.85 lakhs being the difference between the amounts recorded as additional shares of the Company and the total share capital of TSL and TBPL has been adjusted and reflected as general reserve, instead of capital reserve as prescribed under Accounting Standard – 14 in terms of the above court order.

11. The Companys investments in and loans to a wholly owned subsidiary Flourish Securities & Finance Pvt. Ltd. (FSPL) and a joint venture company, Cimco Equity Holding Private Ltd. (CHEPL) aggregating to Rs.14,145.38 lacs (Rs.5,495 lacs) have been utilized for acquiring controlling stake in and repurchase of certain financial assets like leased wagons, debts / loans of Cimmco Limited, a company under rehabilitation, the scheme whereof has been approved by the Board for Industrial and Financial Reconstruction (BIFR). In terms of the said approved scheme of BIFR, the rehabilitation of Cimmco Limited is under implementation and the Company, as a copromoter has given financial and other indemnity to BIFR for fulfillment of the terms of the said scheme. In the opinion of the management, all the above loans and investments are strategic in nature, with the objective of business expansion and diversification of the company and accordingly, these are considered good of recovery.

12. Previous years figures have been shown within brackets and have been regrouped / rearranged wherever necessary. In view of the merger of erstwhile TSL and TBPL with the Company with effect from April 1, 2009, pursuant to the Scheme of Amalgamation as mentioned in Note No. 25 above, the figures of the previous year are not comparable with the figures of the current year.


Mar 31, 2008

1. Contingent Liabilities:

a) Claims not acknowledged as debts - Rs.123.20 Lacs (Rs. 34770 Lacs).

b) Income tax demands under appeal - Rs. 80.87 Lacs (Rs. 64.27 Lacs).

c) Excise demands under appeal - Rs. 264.29 Lacs (Rs. NIL).

d) Sales tax demands under appeal - Rs. 223.70 Lacs (Rs. NIL).

e) Sales tax liability and stamp duty liability if any, arising on account of acquisition of "Heavy Engineering Division" from Hyderabad Industries Limited as a going concern in terms of "Business Transfer Agreement" dated 4th April, 2005.

f) Outstanding Guarantees and Letters of Credit from Banks Rs. 11,547.04 Lacs (Rs. 9,558.41 Lacs).

g) Future export obligations with respect to duty free imports against advance/ EPCG licenses -Rs. 886.00 Lacs (Rs. 1201.09 Lacs).

2. Estimated amount of Capital contracts not provided for (net of advances) - Rs. 608.62 Lacs (Rs. 147.52 Lacs).

3. Working capital borrowings and external commercial borrowings from Banks and non funded facilities comprising of bank guarantees and letters of credit are secured by hypothecation of stocks, book debts, movable properties of any kind and fixed assets, both present and future and equitable mortgage of immovable properties of the Company and personal Guarantee of Shri Umesh Chowdhary, Managing Director and Shri J P Chowdhary, Executive Chairman. Loan from a body corporate is secured by exclusive charge on the wheel sets procured/imported with the amount.

4. The Companys application for increase in Gross value of fixed capital Assets by Rs. 78.95 Lacs and allowance of sale tax deferment loan aggregating to Rs 51.72 Lacs for the period from January 2005 to March 2005 is pending grant by the relevant authorities. The matter is being pursued by the Company and accordingly, such amount has been included in Sales Tax Deferment loan and shown as Unsecured Loan.

5. Sales are net of Liquidated damages and de-escalation claims amounting toRs. 342.00 Lacs (Including Rs. 203.14 Lacs for earlier years) (net) (Rs. 102.70 Lacs).

6. In compliance with Accounting Standard -17 issued by the Institute of Chartered Accountants of India (ICAI) the disclosure in respect of Business Segment are as follows:

Business Segment:

The business segments based on Companys products have been identified as "Wagons", "Heavy Earth Moving & Mining equipments (HEMM)" and "Steel Castings".

Wagons : Consists of manufacturing of wagon as per customers specification

Heavy Earth Moving & Mining equipments: Consists of manufacturing of earth moving equipments.

Steel Castings : Consists of foundry castings including Bogies and Couplers.

Others : Consists of miscellaneous business comprising of less than 10% revenue.

Geographical Segment:

The Company primarily operates in India and therefore the analysis of geographical segment is demarcated on the basis of location of its customers in India and outside India.

The Company has common fixed assets for producing goods for domestic and overseas markets. Hence, separate figures for fixed assets/additions to fixed assets thereof cannot be furnished.

7. Miscellaneous Expenses include expenses towards Research and Development Rs. 84.78 Lacs (Rs. 5.10 Lacs).

8. The Company has raised a sum of Rs. 8,800.00 Lacs during the year through issue of 16,79,390 fully convertible preference shares of Rs. 10 each at a premium of Rs. 514.00 per share through private placement. These shares were converted into equity shares on February 1, 2008 into 16,79,390 equity shares of Rs.10 each and consequently, Rs. 8,632.06 Lacs has been added to the Securities Premium Account.

a) The Company has made an Initial Public Offer (IPO) of 23,83,768 equity shares of Rs. 10 each at a premium of Rs. 530 per share (consisting of 20,68,111 equity shares of Rs. 10 each as fresh issue and 3,15,657 equity shares of Rs. 10 each as offer for sale from existing shareholders) on 100% book building basis. The issue was opened on 24th March 2008 and closed on 27th March 2008. Pending allotment of shares as on the balance sheet date, the entire amount received from IPO has been disclosed as "Share application money" in the accounts;

b) The allotment of shares (20,68,111 equity shares of Rs. 10 each) against IPO has since been completed on April 9, 2008. Though the existing provisions of the Articles of Association of the Company provides for pro-rata dividend, the Board has proposed full dividend on the enhanced shared capital as detailed above, since the listing agreement entered into with the stock exchange and the regulations specified by Securities and Exchange Board of India require dividend to be paid on such enhanced capital.

9. On December 31,2007, the Company has entered into a Co-operation and Funding Agreement with JPMorgan Mauritius Holdings Limited (JPM), for the purpose of proposing to Board of Industrial and Financial Reconstruction (BIFR), scheme of revival and rehabilitation of Cimmco Birla Limited (C8L) which is subject to sanction of BIFR and other approvals. If an acceptable scheme which includes restructuring of entire liabilities of CBL and exemption under the Takeover Regulations, is agreed to by both parties and is sanctioned by the BIFR under section 18 of the SICA, the Company may require to invest up to Rs. 3,500 Lacs in CBL. As a part of scheme, the Company intends to acquire equity or such other instruments as may be approved by the Board.

10. The Company has entered into a joint venture agreement dated January 22, 2008 (FCA JVA) with FreightCar America Inc (FCA) to jointly promote and incorporate a private limited company in India (FCA JVA) to develop, design, manufacture, service and distribute an aluminium coal hopper with FreightCar America AutoFloodTM gates and an aluminium coal gondola and such other wagon products as may be agreed from time to time between the parties in selected countries in South Asia (including India) and Africa.

11. The Company has operating leases for office premises/ guest house purpose that are renewable on a periodic basis and are cancelable by giving a notice period ranging from one month to three months.

The amount of rent expenses included in Profit and Loss Account towards operating Leases aggregate to Rs 24.31 Lacs (Rs. 25.33 Lacs).

12. No provision has been considered necessary in respect of diminution in the value of unquoted investments of Rs. 77.45 Lacs (66.95 Lacs) in the Subsidiary Company as these investments are strategic in nature and in the opinion of the management, such shortfall is temporary in nature.

13. Previous years figures have been shown within brackets and have been regrouped/rearranged wherever necessary.

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