Notes to Accounts of TIL Ltd.
Mar 31, 2023
Income Tax (Benefits)/Expenses
The Company is subject to income tax in India on the basis of Standalone Financial Statements. As per the Income Tax Act, the Company is liable to pay income tax which is the higher of regular income tax payable and the amount payable based on the provisions applicable for Minimum Alternate Tax (MAT).
MAT paid in excess of regular income tax during a year can be carried forward for a period of 15 years and can be set-off against future tax liabilities.
10.1 The Company has carried forward Minimum Alternate Tax Credit of '' 3,026 Lakhs as on 31st March 2023 (a component of deferred tax asset in the financial statements) which was accounted for in the earlier years. In the opinion of the management sufficient future taxable profit will be available against which these unused tax credits can be utilized within the stipulated period under the provisions of Income Tax Act 1961.
10.2 The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year ended 31st March 2023 and 31st March 2022 in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
10.3 The Company is not creating/recognizing deferred tax assets on unused tax losses.
12.2 Value of inventories of Raw Materials above is stated after provisions of '' 383 Lakhs (Previous year '' 602 Lakhs ) on slow moving stock. Further, '' 56 Lakhs (Previous year '' 11,348 Lakhs; shown as Exceptional Items under note 32) have been written off during the year based on physical verification conducted by the management.
12.3 Value of inventories of Work-In-Progress above is stated after provisions of '' 51 Lakhs (Previous year '' 101 Lakhs) for write down to net realizable value. Further, '' Nil (Previous year '' 1,525 Lakhs; shown as Exceptional Item under note 32) have been written off during the year. Further, Stock-in-trade amounting to '' 52 Lakhs (Previous year '' 1,535 Lakhs; shown as Exceptional Item under note 32) have been written off during the year based on physical verification conducted by the management.
12.4 For details of Inventories given as security against borrowing (Refer Note 17.2)
12.5 Raw Materials/Stores and Spares includes materials valuing '' 3,248 Lakhs (Previous year '' 3,787 Lakhs) lying in Bonded Warehouse/at Port as on 31st March 2023 which also includes '' 3,234 Lakhs imported in the earlier years. These inventories could not be released from the authorities due to non-payment of custom duty, other charges etc. The management does not expect any material loss on account of any obsolescence in these said stocks due to passage of time and no provision is considered necessary. Further '' 190 Lakhs (Previous year '' Nil) have been written off during the year on account of auction by Customs Authority.
In determining the allowances for credit losses of trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected allowance for credit losses is based on the ageing of the receivables that are due and rates used in the provision matrix.
13.2 There are no debts due by the Directors or other officer of the Company or any of them severally or jointly with any other person or debts due by the firm or private companies respectively in which any Director is a partner or a Director or a member.
13.3 There are no unbilled receivable as on 31st March 2023 and 31st March 2022.
15.1 Rights, Preferences and Restrictions attached to Equity Shares
The Company has one class of Equity Shares having a par value of '' 10/- per share. Each Shareholder is eligible for one vote per share held. Shareholders are entitled to Dividend as and when proposed by the Board of Directors which is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
17.1 As referred in Note 34, lenders have declared the loan facilities granted to the Company as NPA. Further, all lenders, except 2 banks, have recalled loan facilities granted to the Company and accordingly, the amount outstanding on the recall dates have become immediately due and hence, have been classified as current borrowings amounting to '' 3,814 Lakhs (Previous year Nil).
Current maturities of long term debt includes '' 256 Lakhs (Previous year '' 1,487 Lakhs) where recall notices have not been issued by the banks.
21.2 As referred to in Note No. 34, lenders have declared the loan facilities granted to the Company as NPA. The loan accounts have been downgraded on account of default/non-payment of principal/interest or continuous overdrawn cash credit limits. Due to this, some banks/ financial institutions have provided outstanding amounts including unapplied interest upto 31st March 2023 whereas some of the banks have provided outstanding amounts without unapplied interest. However, the management has provided for interest upto 31st March 2023 based on management''s best estimates in case where interest was not applied by banks/Financial Institutions post NPA downgradation.
28.1 Employee Benefits
The Company has recognized, in the Standalone Statement of Profit and Loss for the year ended 31st March 2023 an
amount of '' 202 Lakhs (Previous year '' 318 Lakhs) as expenses under defined contribution plans.
Defined Benefit Plans
(A) Gratuity Fund
The Company makes periodic contributions to the Tractors India Limited Staff Gratuity Fund, a funded defined benefit-plan for qualifying employees administrated under a common Trust by the trustees of the said fund for the benefit of the employees of the Company.
Under the Gratuity plan, every employee is entitled to gratuity, being higher of the amount, calculated under the Company''s plan (based on average salary of last 36 months and number of years of service, restricted to a maximum of 40 years) or calculations as laid down under the Payment of Gratuity Act, 1972. Gratuity is payable on death/ retirement/termination and the benefit vests after 5 year of continuous service.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation was carried out as at 31st March 2023.
(B) Superannuation Fund
(i) Certain eligible employees of the Company who had attained at least 45 years of age as on 01.04.2009 are entitled to Superannuation benefit under the Superannuation scheme (a funded Defined Benefit Plan under a common Trust- ''Tractors India Limited Superannuation Fund Scheme'', being administered by the trustees of the said fund for the benefit of employees of the Company). Under the aforesaid benefit scheme the Company makes periodic contribution to the Superannuation Fund Scheme and a predetermined percentage of salary is paid as pension on retirement. The quantum of pension depends on the average basic salary of eligible employee during the last 36 months before retirement. The benefit vests to employees with 12 years of continuous service and attainment of 48 years of age on retirement/death/termination. The most recent actuarial valuation of plan assets and present value of the Defined Benefit Obligation of Superannuation Fund was carried out as on 31st March 2023
(ii) Employees who did not attain 45 years of age as on 1st April 2009 are under the purview of ''Defined Contribution Scheme'' in respect of service rendered from 1st April 2009. The benefit of services rendered by these employees up to 31st March 2009 come under the purview of ''Defined Benefit Scheme'' as indicated which is frozen as on 31st March 2009. Hence for this category of employees, the benefit of cessation of service will be :
a) amount accumulated by annual contribution of 15% of Basic Salary and
b) amount frozen as on 31st March 2009
(C) Provident Fund
The Company has two separate Trusts for the administration of the Provident Fund. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered interest rates on annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered interest rates on annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors.
Risk Management
The Defined Benefit Plans expose the Company to risk of actuarial deficit arising out of investment risk, interest rate risk and salary cost inflation risk.
(a) Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government/high quality bond yields; if the return on plan asset is below this rate, it will create a plan deficit.
(b) Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.
(c) Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan
participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
(d) Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation was carried out as at 31st March 2023.
28.3 The basis used to determine overall expected rate of return on assets and the effect on major categories of Plan Assets is as follows:
The major portions of the assets are invested in PSU Bonds, State and Central Government Securities. Based on the asset allocation and prevailing yield rates on these asset classes, the long term estimate of the expected rate of return on the fund assets have been arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching Government Bonds.
28.4 The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant reasons.
28.5 Sensitivity Analysis
The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation and the asset value changes may offset the impact to some extent. For presenting the sensitivities, the present value of the Defined Benefit Obligation has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of the Sensitivity Analysis from previous year.
Based on the findings of the Management audit report, and also considered by the Board of Directors in its meeting held on 13th September 2022, certain accounting adjustments have been carried out during the year ended 31st March 2022 to rectify those accounting mistakes/misstatements made in the books of accounts in the previous financial years. The cumulative impact of those rectifications/adjustments has been shown as an "Exceptional Item" in the Statement of Profit & Loss in previous F.Y. 21-22.
"Exceptional Item"as stated above represents the following accounting adjustments carried during the year ended March 2022.
A. In earlier years, loans amounting to '' 3,276 Lakhs & '' 1,200 Lakhs were received from the promoters/promoters group of companies and other lenders respectively which was wrongly credited to Inventories account instead of respective loan accounts. The same has been rectified by reinstating the respective loan accounts and inventory. The amount of inventory as reinstated above has been written off subsequently and shown as the exceptional item. Further certain loans amounting to '' 35 Lakhs as reinstated above has also been written back and grouped under exceptional item.
B. Based on the findings of the Management audit report, a difference of '' 11,109 Lakhs have been identified between the Inventory as shown in books of accounts and the inventory appearing in Material module in the ERP system as on
31st March 2022. Such difference comprises '' 4,476 Lakhs as mentioned in the point no. A above and further difference of '' 6,633 Lakhs owing to certain wrong accounting carried out. Hence such balances have been written off during the year to reflect the correct position of Inventory as on the Balance Sheet date.
C. During the previous year the management has also engaged an external party to physically verify its inventory and also to make a value assessment of inventory lying physically. Based on the findings of the surveyor''s report (covering 59% of Inventory lying as on 28th February 2022 for the verification & value assessment), a sum of '' 3,299 Lakhs (including '' 282 Lakhs based on internal assessment) has been written off/provided for and also shown as exceptional item.
D. The Company had raised certain wrong sales invoices in earlier years. Trade receivables amounting to '' 14,394 Lakhs against such invoices as identified by the management auditors and further '' 2,980 Lakhs as identified by the management have been classified as irrecoverable. Further based on management''s internal assessment on the recoverability of other trade receivables, additional balances amounting to '' 2,923 Lakhs have also been identified as irrecoverable. Hence a sum of '' 8,347 Lakhs (net of '' 5,830 Lakhs of further provision during the year and utilisation of '' 6,119 Lakhs out of provision made in earlier years) have been written off and shown as exceptional item.
E. The Company has been engaged into certain trading activities since financial year 2019-2020 and has been complying with all the requisite rules & regulations including "The Goods & Services Tax Act 2017â. During the first quarter ended 30th June 2021, certain bills of exchange were accepted by certain employees without receipt of supplies and the banks later recovered the money from the Company which has been debited to suppliers'' accounts and shown as advances. Consequently, such advances to the tune of '' 3,232 Lakhs could not be recovered and hence a sum of '' 1,400 Lakhs has been written off and balance amount of '' 1,832 Lakhs has been provided for as an abundant precaution and shown as exceptional item.
33 The Company has not carried out Fair Valuation of interest free loans from the promoters/ promoter''s group of companies and other lenders aggregating to '' 15,885 Lakhs as required under Ind AS-109 and its impact on Standalone Financial Statements has not been ascertained.
34 During the year, the Company has incurred a cash loss of '' 8,314 Lakhs (Previous year '' 41,699 Lakhs) during the year and its net worth is negative as on the Balance Sheet date. Moreover, the Company''s current liabilities also exceed its current assets as at 31st March 2023. In view of the acute financial crisis faced by the Company, lenders have declared the loan facilities granted to the Company as a Non-Performing Asset (NPA). However, the lenders have also extended ''Holding on Operations'' to the Company through a ''Trust & Retention Account'' opened with the Lead Bank of the Consortium namely, Bank of India (''BOI''). Consequently, the lead bank, namely Bank Of India, has filed a petition under Section 7 of the IBC before the Hon''ble National Company Law Tribunal on 28th September 2022. The application is yet to be admitted. Meanwhile, the Board of Directors approved a resolution plan at its meeting held on 26th November 2022 which has been submitted with all of TIL''s Consortium Bankers on 28th November 2022, which is currently under discussion. Considering these developments, the matter had been adjourned by NCLT from time to time; with the next date of hearing being 19th June 2023.
Though the above situation is indicative of a material uncertainty that may cast doubt on the Company''s ability to continue as a going concern, but in view of the proposed strategic investment and proposed resolution plan together
with sales orders in hand, the management has concluded that the material uncertainties are expected to be mitigated and hence the Standalone Financial Statements have been prepared on a going concern basis.
35 As reported earlier, an enquiry by "Directorate of Revenue Intelligence & Enforcementâ (DRI) has been ongoing since June 2021 in respect to certain trading transactions and other matters related to earlier years and the Company has since complied with the requirements of the DRI. On 7th November 2022, and 10th November 2022, the Company received an Investigation report of DRI dated 20th July 2022 from the GST Authority, together with certain demand intimations based on the Investigation report. These demand intimations were for FY 2019-20 and for FY 2020-21 for payment of tax/interest/penalty amounting to '' 928.90 Lakhs & '' 3,290.79 Lakhs respectively under Section 74(5) of the GST Act; and reply to such intimations had been filed by the Company on 17th January 2023. Subsequently, on 24th March 2023, Show Cause Notice - DRC-01 for FY 2019-2020 was issued u/s. 74(1) of the CGST/WBGST Act, 2017 to the Company. A personal hearing was held on 6th April 2023, pursuant to which certain clarifications were submitted by the Company on 17th April 2023. Also, a reply to the Show Cause notice was submitted to the GST Authorities on 8th May 2023. On the same day, i.e. 8th May 2023, an Order was issued by the GST authorities for tax, interest, and penalty adding to '' 958.97 Lakhs for FY 2019-20. The Company is of the view that the demand raised by GST authorities does not have merit, and hence an appeal against this order shall be filed before the prescribed Appellate Authority as per the provisions under Sec 107 of the CGST Act. In view of this, no provision is considered necessary by the management.
36 Trade Receivables, Advances to Suppliers, Trade Payable and Advances from customers amounting to '' 3,019 Lakhs (Previous year '' 2,610 Lakhs), '' 1,050 Lakhs (Previous year '' 1,008 Lakhs), '' 12,542 Lakhs (Previous year '' 9,284 Lakhs), and '' 3,494 Lakhs (Previous year '' 3,873 Lakhs) respectively were outstanding as on 31st March 2023. The Company could not get necessary confirmations from the respective parties due to prevailing situation of the Company. Further, the Company could not get confirmations for Loans from bodies corporate to the extent of '' 897 Lakhs (Previous year '' 865 Lakhs) lying outstanding as on 31st March 2023. However, the Company doesn''t foresee any material impact on its Financial Statements due to such non receipt of confirmation.
|
37.1 Contingent Liabilities in respect of |
||
|
Particulars |
As at 31.03.2023 |
As at 31.03.2022 |
|
a. Sales Tax/Value Added Tax Matters under dispute [Related payments '' Nil (31.03.2022: Nil)] |
2,192 |
2,192 |
|
b. Goods and Services Tax Matters under dispute |
959 |
- |
|
c. Income Tax Matters under dispute [Related payments (including amounts adjusted by the Department) '' 307 Lakhs (31.03.2022: '' 268 Lakhs)] |
377 |
2,109 |
|
d. Service Tax Matters under dispute [Related payments '' 26 Lakhs (31.03.2022: '' 26 Lakhs)] |
960 |
667 |
|
e. Excise Duty Matters under dispute [Related payments '' 13 Lakhs (31.03.2022: Nil)] |
336 |
- |
|
f. Bank Guarantee Outstanding |
4,759 |
5,545 |
|
37.2 Capital and Other Commitments |
||
|
Particulars |
As at 31.03.2023 |
As at 31.03.2022 |
|
Capital Commitments |
- |
- |
|
Other Commitments |
- |
- |
Future cash outflows in respect of the above matters are determinable only on receipts of judgments/decisions pending at various forums/authorities. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and result of operations.
37.3 Pursuant to final order passed by the Single Bench of Hon''ble Calcutta High Court, the Company has stopped paying Entry Tax on procurement of Indigenous and Imported Goods into West Bengal, with effect from 1st June 2013. The writ petition No. 922 of 2012 filed by TIL has been treated as disposed of in the High Court and the records thereof have been sent to the WB Taxation Tribunal. TIL has filed a petition before the West Bengal Taxation Tribunal. The related unpaid amount till 31st March 2023 is '' 632 Lakhs (31.03.2022 : '' 632 Lakhs).
38 INFORMATION GIVEN IN ACCORDANCE WITH THE REQUIREMENTS OF IND AS 108 ON SEGMENT REPORTING
The operations of the Company pertains only to Material Handling Solutions (i.e. manufacturing and marketing of various Material Handling Equipment namely Mobile Cranes, Port Equipment, Self Loading Truck Cranes, Road Construction Equipment, etc. and dealing in spares and providing services to related equipment). Further, the Company''s principal geographical area of operations is within India. Accordingly, the Company has only one reportable segment as envisaged in Ind AS 108 on ''Segment Reporting'' and information pertaining to segment is not applicable for the Company.
The Company aims at maintaining a strong capital base maximizing Shareholders'' wealth safeguarding business continuity and augments its internal generations with a judicious use of borrowing facilities to fund spikes in working capital that arise from time to time as well as requirements to finance business growth.
The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through cash generated from operations, long term and short term borrowings from banks and financial institutions. On requirement, the Company also borrows from related and other parties to meet its financial needs.
However in view of certain adverse factors and challenges being faced by the Company over past few years as explained in Note 34, the net worth of the Company is eroded.
The capital structure of the Company consists of net debt (borrowings as detailed in Note 17 offset by cash and cash equivalents in Note 14-A, other bank balances in Note 14-B and deposits with banks including earmarked balances in Note 9A) and total equity of the Company.
Net debt includes interest bearing borrowings less cash and cash equivalents, other bank balances (including non-current earmarked balances).
40 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
This section gives an overview of the significance of Financial Instruments for the Company and provides additional information on Balance Sheet items that contain Financial Instruments.
The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized in respect of each class of Financial Asset, Financial Liability and Equity Instrument are disclosed in Note 2.13 to the Standalone Financial Statements.
The management assessed that cash and cash equivalents, other bank balances, trade receivables, trade payables, other financial assets and other financial liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. Lease liabilities have fair values that approximate to their carrying amounts as it is based on the net present value of the anticipated future cash flows.
B) Financial Risk Management Objectives
The Company''s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company continues to focus on a system-based approach to business risk management. The Company''s financial risk management process seeks to enable the early identification, evaluation and effective management of key risks facing the business. Backed by strong internal control systems, the current Risk Management System rests on policies and procedures issued by appropriate authorities; process of regular reviews/audits to set appropriate risk limits and controls; monitoring of such risks and compliance confirmation for the same.
a) Market Risk
The Company''s Financial Instruments are exposed to market changes. The Company is exposed to the following significant market risk:
Foreign Currency Risk Interest Rate Risk Other Price Risk
Market Risk Exposures are measured using sensitivity analysis. There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured.
Fair Value Hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at Fair Value, grouped into Level 1 to Level 3, as described below:
Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares and includes derivative contracts.
Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
Derivatives not Designated as Hedging Instruments
The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions.
The Company enters into foreign exchange forward contracts with the intention to reduce 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.
However, during the current and previous year, the Company has not entered into any forward contracts due to the current financial position of t he Company.
Interest Rate Risk
Interest rate risk refers to the risk that the Fair Value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The objectives of the Company''s interest rate risk management processes are to lessen the impact of adverse interest rate movements on its earnings and cash flows and to minimise counter party risks.
All the borrowings availed by the Company have a fixed interest rate throughout the respective financial year. Further, the Company operates with banks having superior credit rating in the market.
* The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of changes in market interest rates. Further, all lenders have declared loan facilities granted to the Company as NPA and are not charging interest, hence, interest rate risk does not arise.
Price Risk
Equity price risk is related to change in market reference price of investments in equity securities held by the Company. The Fair Value of quoted investments held by the Company exposes the Company to equity price risks. In general, these investments are not held for trading purposes. The Fair Value of quoted investments in equity, classified as Fair Value through Profit & Loss as at 31st March 2023 is '' 10 Lakhs (31.03.2022: '' 8 Lakh).
b) Liquidity Risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company mitigates its liquidity risks by ensuring timely collections of its trade receivables, close monitoring of its credit cycle and ensuring optimal movements of its inventories. The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date:
The management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.
The maturity analysis of undiscounted lease liabilities are disclosed under Note 5.3.
c) Credit Risk
Credit risk is the risk that counter party will not meet its obligations leading to a financial loss. The Company has its policies to limit its exposure to credit risk arising from outstanding receivables. Management regularly assess the credit quality of its customers, on the basis which the terms of payment are decided. Credit limits are set for each customer which are reviewed at periodic i ntervals.
III) Terms and Conditions of Transactions with Related Parties
a) The transactions with related parties have been entered at an amount which are not materially different from those on normal commercial terms.
b) The amounts outstanding are unsecured and will be settled in cash and cash equivalent. No guarantees have been given or received.
c) The remuneration of Directors is determined by the Nominations & Remuneration Committee having regard to the performance of individuals and market trends.
IV) In respect of the above parties, there is no provision for impairment/doubtful debts as on 31st March 2023 and no amount
has been written off or written back during the year in respect of debt due from/to them except as disclosed above.
V) The above related party information is as identified by the management.
43 Additional Disclosures Relating to the Requirement of Revised Schedule III
43.1 Loans or Advances (repayable on demand or without specifying any terms or period of repayment) to Specified Persons
During the year ended 31st March 2023 the Company did not provide any loans or advances which remains outstanding (repayable on demand or without specifying any terms or period of repayment) to specified persons (Nil as on 31st March 2022).
43.2 Relationship with Struck off Companies
The Company did not have any transaction with companies struck off during the year ended 31st March 2023 and 31st March 2022.
43.3 Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto Currency or Virtual Currency during the year ended 31st March 2023
onrl 1 1 ct [\/lorrh 1011
43.4 Utilization of Borrowed Fund & Share Premium
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
43.6 The Company has not been declared as a wilful defaulter by any Banks or Financial Institutions or any other Lender.
43.7 The Company has used the borrowings from Banks and Financial Institutions for the specific purpose for which it was obtained.
45 In its Extraordinary General Meeting convened on 23rd December 2022, the Company has received Shareholders'' Approval for the proposed strategic investment by issue of 7,496,592 (Seventy Four Lakh Ninety Six Thousand Five Hundred Ninety Two) equity shares of face value of '' 10 (Rupees Ten) per share at a price of '' 92.40 (Rupees Ninety Two and forty Paise) per share through Preferential allotment in favor of Indocrest Defence Solutions Private Limited pursuant to the provisions of Regulation 164A of the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018; and which is subject to approvals from appropriate authorities and lending institutions. Accordingly, the Stock Exchanges have also been informed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
46 The Central Government has published The Code on Social Security, 2020 and Industrial Relations Code, 2020 ("the Codesâ) in the Gazette of India, inter alia, subsuming various existing labour and industrial laws which deals with employees related benefits including post - employment. The effective date of the code and the rules are yet to be notified. The impact of the legislative changes, if any, will be assessed and recognized post notification of the relevant provisions.
47 The Standalone Financial Statements were approved by the Board of Directors on 26th May 2023.
48 The previous year figures have been regrouped/reclassified wherever necessary, to conform the current period''s classification.
Mar 31, 2018
Notes:
10.1 Balance with Statutory / Government Authorities relates to duty credit entitlements and amounts paid under protest in respect of demands from regulatory authorities,
10.2 Prepaid lease payment relate to land leases classified as operating in nature as the title is not expected to transfer at the end of the lease term considering that land has an indefinite economic life,
In determining the allowances for credit losses of trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.
(iii) The Company considers its maximum exposure to credit risk with respect to customers as at 31.03.2018 to be '' 12,083 Lakhs (31.03.2017: '' 7,504 Lakhs, 01.04.2016: '' 12,081 Lakhs), which is the fair value of trade receivables (after allowance for credit losses).
The Company''s exposure to customers is diversified and also no single customer contributes more than 10% of the outstanding receivable as at 31.03.2018, 31.03.2017 and 01.04.2016
(iv) There are no outstanding debts due from directors or other officers of the Company
1 Rights, Preferences and Restrictions attached to Equity Shares
The Company has one class of Equity Shares having a par value of '' 10/- per share. Each shareholder is eligible for one vote per share held. The Dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend. In the event of liquidation, the Equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
Consequent to the introduction of Goods and Service Tax (GST) with effect from 1st July 2017, Central Excise, Value Added Tax etc. have been subsumed into GST. In accordance with In AS - 18 on "Revenueâ and Schedule III of the Companies Act 2013, unlike Excise Duty levies like GST, VAT etc. are not part of Revenue. Accordingly the figures for the period up to 30th June 2017 are not strictly relatable to those thereafter,
* Government Grants under duty drawback scheme
2 Employee Benefits
The Company has recognized, in Statement of Profit and Loss for the year ended 31.03.2018 an amount of Rs, 294 Lakhs (Previous year Rs, 217 Lakhs) as expenses under defined contribution plans.
Defined benefit plans
(A) Gratuity Fund :
The Company makes periodic contributions to the Tractors India Limited Staff Gratuity Fund, a funded defined benefit-plan for qualifying employees administrated under a common Trust by the trustees of the said fund for the benefit of the employees of the Company
Under the Gratuity plan, every employee is entitled to gratuity, being higher of the amount, calculated under the Company''s plan (based on average salary of last 36 months and number of years of service, restricted to a maximum of 40 years) or calculations as laid down under the Payment of Gratuity Act, 1972. Gratuity is payable on death / retirement / termination and the benefit vests after 5 year of continuous service.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation was carried out as at 31st March 2018.
(B) Superannuation Fund :
(i) Certain eligible employees of the Company who had attained at least 45 years of age as on 01.04.2009 are entitled to Superannuation benefit under the Superannuation scheme (a funded Defined Benefit Plan under a common Trust- ''Tractors India Limited Superannuation Fund Scheme'', being administered by the trustees of the said fund for the benefit of employees of the Company). Under the aforesaid benefit scheme the Company makes periodic contribution to the Superannuation Fund Scheme and a predetermined percentage of salary is paid as pension on retirement. The quantum of pension depends on the average basic salary of eligible employee during the last 36 months before retirement. The benefit vests to employees with 12 years of continuous service and attainment of 48 years of age on retirement/death/termination. The most recent actuarial valuation of Plan Assets and Present Value of the Defined Benefit Obligation of Superannuation Fund was carried out as on 31.03.2018
(ii) Employees who did not attain 45 years of age as on 01.04.2009 are under the purview of ''Defined Contribution Scheme'' in respect of service rendered from 01.04.2009. The benefit of services rendered by these employees up to 31.03.2009 come under the purview of ''Defined Benefit Scheme'' as indicated which is frozen as on 31.03.2009.
Hence for this category of employees, the benefit of cessation of service will be :
a) amount accumulated by annual contribution of 15% of Basic Salary and
b) amount frozen as on 31.03.2009
Defined contribution plans
(C) Provident Fund :
The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered interest rates on annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors,
Risk Management
The Defined Benefit Plans expose the Company to risk of actuarial deficit arising out of investment risk, interest rate risk and salary cost inflation risk,
(a) Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government/high quality bond yields; if the return on plan asset is below this rate, it will create a plan deficit.
(b) Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.
(c) Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability
d) Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation was carried out as at 31.03.2018.
Basis used to determine the Expected Rate of Return on Plan Assets
The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect the capital and optimize returns within acceptable risk parameters, the plan assets are well diversified,
3 The basis used to determine overall expected rate of return on assets and the effect on major categories of Plan Assets is as follows :
The major portions of the assets are invested in PSU Bonds, State and Central Government Securities. Based on the asset allocation and prevailing yield rates on these asset classes, the long term estimate of the expected rate of return on the fund assets have been arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching Government Bonds,
4 The estimate of future salary increases take into account inflation, seniority, promotion and other relevant reasons,
5 Sensitivity Analysis
The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation and the asset value changes may offset the impact to some extent. For presenting the sensitivities, the present value of the Defined Benefit Obligation has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of the Sensitivity Analysis from previous year.
6 The Company has various residential / commercial premises and machines taken under cancellable operating lease. Terms of the lease include operating term for renewal, increase in rent for future periods, terms of cancellation etc. The operating lease expenses incurred for the year amount to Rs, 226 Lakhs (Previous Year Rs, 328 Lakhs).
Exceptional Items consists of the following :
7 Sale Proceeds of Caterpillar Dealership Business net of related expenses and investments.
8 Inventory written off due to obsolescence arising from change in customer requirements, product mix etc.
9 Trade Receivables written off - materials taken back from customers due to non payment.
Future cash outflows in respect of the above matters are determinable only on receipts of judgments / decisions pending at various forums / authorities. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and result of operations,
10 Based on legal proceedings initiated by the Employees'' Union / Association and the interim order of the Humble Calcutta High Court dated 22nd December 2006 and 18th April 2007 restraining the Company from making any contribution / deduction towards Employees'' State Insurance in respect of its Kamarhatty (with effect from October 2006) and Tarantella (with effect from March 2007) units, in respect of employees whose monthly salaries (i.e. basic, dearness allowance and overtime ) are between Rs, 7,501 and Rs, 10,000, no contributions / deductions have been made and deposited with the appropriate authorities. The related amounts involved as on 31st March 2018 being Employer''s share Rs, 4 Lakhs (31.03.2017: Rs, 4 Lakhs, 01.04.2016: Rs, 4 Lakhs) and Employees'' share Rs, 1 Lakh (31.03.2017: Rs, 1 Lakh, 01.04.2016: Rs, 1 Lakh).
11 Consequent to enhancement of Employees'' State Insurance benefit ceiling for ''Employee Wages'' from '' 10,000 to '' 15,000 per month with effect from 1st May 2010, legal proceedings have been initiated by the Employees'' Union / Association of the Company and an interim order dated 13th August 2010 has been issued by the Humble Calcutta High Court in this regard, restraining the Company from making contribution / deduction towards Employees'' State Insurance in respect of employees whose monthly salaries (i.e. basic, dearness allowance and overtime) are between '' 10,001 and '' 15,000. In view of the said Order, the Company has neither deducted from the certain concerned employees nor contributed its own share to the Employees State Insurance Scheme with effect from 1st August 2010, the related amounts involved as on 31st March 2018 being Employer''s share Rs, 3 Lakhs (31.03.2017: Rs, 3 Lakhs, 01.04.2016: Rs, 3 Lakhs) and Employees'' share Rs, 1 Lakh (31.03.2017: Rs, 1 Lakh, 01.04.2016: Rs,1 Lakh)
12 Pursuant to a stay order obtained by the Company from the Humble High Court, the Company has stopped paying further Entry Tax on Imported goods into West Bengal, with effect from 1st January 2013. Furthermore, with the introduction of GST, Entry Tax was abolished from 1st July 2017. The related unpaid amount till 31st March 2018 is Rs, 593 Lakhs (31.03.2017: Rs, 543 Lakhs, 01.04.2016: Rs, 413 Lakhs)
13 Information given in accordance with the requirements of In AS 108 on Segment Reporting
The operations of the Company pertains only to Material Handling Solutions (i.e. manufacturing and marketing of various Material Handling Equipments namely Mobile Cranes, Port Equipments, Self Loading Truck Cranes, Road Construction Equipments, etc. and dealing in spares and providing services to related equipments). Further, the Company''s principal geographical area of operations is within India. Accordingly, the Company has only one reportable segment as envisaged in In AS 108 on ''Segment Reporting'' and information pertaining to segment is not applicable for the Company
* Excludes Financial Assets and Deferred Tax Assets
14 First Time Adoption
In AS 101 "First-time Adoption of Indian Accounting Standardsâ provides a suitable starting point for accounting in accordance with In AS and is required to be mandatorily followed by first-time adopters. The Company has prepared the Opening Balance Sheet as per In AS as of 1st April 2016 (the transition date) by:
a. recognizing all assets and liabilities whose recognition is required by In AS,
b. not recognizing items of assets or liabilities which are not permitted by In AS,
c. reclassifying items from previous Generally Accepted Accounting Principles (GAAP) to In AS as required under In AS, and
d. applying In AS in measurement of recognized assets and liabilities,
In AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under In AS. The Company has applied for the following exemptions:
(i) Estimates
The estimates at 1st April 2016 and at 31st March 2017 are consistent with those made for the same dates in accordance with Previous GAAP (after adjustments to reflect any differences in accounting policies),
The estimates used by the Company to present these amounts in accordance with In AS reflect conditions at 1st April 2016, the date of transition to In AS and as of 31st March 2017,
(ii) Classification of Measurement of Financial Assets
The classification of financial assets to be measured at amortized cost or fair value through Profit and Loss is made on the basis of facts and circumstances that existed on the date of transition to In AS,
(iii) Fair value at Deemed Cost for items of Property, Plant and Equipment
Company has elected to use the carrying amount of items of Property, Plant and Equipments under previous GAAP on the date of transition to In AS as deemed cost for In AS,
(iv) Fair value of Investment in Subsidiary
Company has elected to continue with the carrying value of its investment in Subsidiary recognized as of 1st April 2016 (transition date) measured as per the Previous GAAP as its deemed cost as at the date of transition,
(v) Reconciliation of Equity as at 1st April 2016 (date of transition to In AS) and 31st March 2017 (end of last period presented under previous GAAP) as previously reported under Previous GAAP to IND AS
Footnotes to the reconciliation of equity as at 1st April 2016 and 31st March 2017 and Total Comprehensive Income for the year ended 31st March 2017.
(i) Expected Credit Loss Allowances on Financial Assets measured at amortized cost
Under Previous GAAP, provision for doubtful debts was recognized based on the estimates of the outcome and of the financial effect of contingencies determined by the management of the company. This judgment was based on consideration of information available up to the date on which the financial statements were approved.
Under In AS, a loss allowance for expected credit losses is recognized on financial assets carried at amortized cost. Expected loss on individually significant receivables is assessed when they are past due and based on company''s historical counterparty default rates and forecast of macroeconomic factors.
(ii) Fair Valuation of Quoted Equity Investments
Investments in quoted equity instruments, other than investments in subsidiaries, have been measured at fair value through profit or loss as against cost less diminution of other than temporary nature, if any, under the Previous GAAP
(iii) Tax Impact on above adjustments
Under Previous GAAP, deferred tax was accounted using the income statement approach on the timing differences between the taxable profit and accounting profits for the period. Under In AS, deferred tax is recognized following balance sheet approach on the temporary differences between the carrying amount of assets or liabilities in the balance sheet and its tax base. In addition, various transitional adjustments has also led to recognition of deferred taxes on new temporary differences.
(iv) Re-measurement Gains and Losses on Defined Benefit Plans
Under In AS, Re-measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined liability, are recognized in other comprehensive income instead of profit and loss in Previous GAAP
(v) Measurement of Derivatives not designated as Hedging Instruments at Fair Value through Profit or Loss (FVTPL)
Under In AS, changes in the fair value of derivative instruments that are not designated for hedge accounting are recognized in the Statement of Profit and Loss.
(vi) Statement of Cash Flows
The transition from Indian GAAP to In AS has not had a material impact on the statement of cash flows,
15CAPITAL MANAGEMENT
The Company aims at maintaining a strong capital base maximizing shareholders'' wealth safeguarding business continuity and augments its internal generations with a judicious use of borrowing facilities to fund spikes in working capital that arise from time to time as well as requirements to finance business growth,
The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through cash generated from operations, long term and short term borrowings from banks and financial institutions,
The capital structure of the Company consists of net debt (borrowings as detailed in notes 16 and 19 offset by cash and cash equivalents in note 13) and total equity of the Company
Net debt includes interest bearing borrowings less cash and cash equivalents, other bank balances (including non-current earmarked balances).
The table below summarizes the capital, net debt and net debt to equity ratio of the Company
Net debt to equity as at 31.03.2018 and 31.03.2017 has been computed based on average equity and as on 01.04.2016, it is based on closing equity.
16FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
This Section gives an overview of the significance of financial instruments for the Company and provides additional information on Balance Sheet items that contain Financial Instruments. The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized in respect of each class of Financial Asset, Financial Liability and Equity Instrument are disclosed in Note 2 to the Financial Statements.
A) Categories of Financial Instruments
Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s Financial Instruments:
The management assessed that cash and cash equivalents, trade receivables, trade payables, other financial assets and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments,
The fair value of loans from banks, trade payables and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash flows or the discount rate, the fair value of the equity instruments is also responsive to a probable change within reason, in the growth rates. Management regularly assesses a range of alternatives that are more than remote but less than likely occurrences for those significant unobservable inputs and determines their impact on the total fair value,
The fair values of The Company''s interest-bearing borrowings and loans are determined by using Discounted Cash flow Method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. The own nonperformance risk as at 31 March 2018 was assessed to be insignificant. The discount for lack of marketability represents the amounts that the Company has determined that market participants would take into account when pricing the investments.
B) Financial risk management objectives
The Company''s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company continues to focus on a system-based approach to business risk management. The Company''s financial risk management process seeks to enable the early identification, evaluation and effective management of key risks facing the business. Backed by strong internal control systems, the current Risk Management System rests on policies and procedures issued by appropriate authorities; process of regular reviews / audits to set appropriate risk limits and controls; monitoring of such risks and compliance confirmation for the same,
a) Market risk
The Company''s Financial Instruments are exposed to market changes. The Company is exposed to the following significant market risk:
Foreign Currency Risk Interest Rate Risk Other Price Risk
Market Risk Exposures are measured using sensitivity analysis. There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured,
Fair value hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:
Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares and includes derivative contracts.
Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
i. Foreign currency risk
The Company undertakes transactions denominated in foreign currency which results in exchange rate fluctuations. Such exchange rate risk primarily arises from transactions made in foreign exchange and reinstatement risks arising from recognized assets and liabilities, which are not in the Company''s functional currency (Indian Rupees). A significant portion of these transactions are in US Dollar, Euro, etc. The carrying amount of foreign currency denominated financial assets and liabilities including derivative contracts, are as follows:
# Others primarily include GBP-Great Britain Pound, SGD-Singapore Dollar and SEK-Swedish Koran Derivatives not designated as hedging instruments
The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign e
exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions.
The Company enters into foreign exchange forward contracts with the intention to reduce 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.
# Others primarily include GBP-Great Britain Pound, SGD-Singapore Dollar and SEK-Swedish Koran *Amount is below the rounding off norm adopted by the Company.
Note: If the rate is decreased by 2%, profit of the Company will increase by an equal amount.
Figures in brackets indicate decrease in profit
ii. Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The objectives of the Company''s interest rate risk management processes are to lessen the impact of adverse interest rate movements on its earnings and cash flows and to minimize counter party risks,
All the borrowings availed by the company have a fixed interest rate throughout the respective financial year. Further, the Company operates with banks having superior credit rating in the market,
* All the borrowings availed by the company have a fixed interest rate throughout the respective financial year. Considering the same, no interest rate sensitivity arises and there is no impact of the same on the financial statements of the company.
iii. Price risk
Equity price risk is related to change in market reference price of investments in equity securities held by the Company, The fair value of quoted investments held by the Company exposes the Company to equity price risks. In general, these investments are not held for trading purposes. The fair value of quoted investments in equity, classified as fair value through Profit & Loss as at 31 March 2018 is Rs, 15 Lakhs (31.03.2017: Rs, 16 Lakhs, 01.04.2016: Rs, 20 Lakhs).
b) Liquidity risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company mitigates its liquidity risks by ensuring timely collections of its trade receivables, close monitoring of its credit cycle and ensuring optimal movements of its inventories. The table below provides details regarding the remaining contractual maturities of significant financial liabilities at the reporting date.
The management monitors rolling forecasts ot the Company s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.
c) Credit risk
Credit risk is the risk that counter party will not meet its obligations leading to a financial loss. The Company has its policies to limit its exposure to credit risk arising from outstanding receivables. Management regularly assess the credit quality of its customers, on the basis which the terms of payment are decided. Credit limits are set for each customer which are reviewed at periodic intervals.
17 Related Party Disclosures A) List of Related Parties
Subsidiaries TIL Overseas Pet Limited
Tractors Nepal Private Limited A
Tractors India Private Limited A A Ceased to be subsidiaries i.e. 1st April 2016
Key Management Personnel Mr. Sumit Mazumder (Chairman & Managing Director)
Mr. Aloke Banerjee (Director - Finance i.e. 1st January 2017 & Chief Financial Officer )
Mr. Sekhar Bhattacharjee (Company Secretary)
Mr. Somnath Bhattacharjee (President and Chief Executive Officer)A A[Resigned with effect from 31st August 2016]
Enterprises over which Key Management Personnel are able to exercise significant influence TIL Welfare Trust
Mar 31, 2016
1 Reconciliation of the number of Equity shares
2 Rights, Preferences and Restrictions attached to Equity Shares
The Company has one class of Equity Shares having a par value of '' 10/- per share. Each shareholder is eligible for one vote per share held. The Dividend if proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend. In the event of liquidation, the Equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
3 Details of Shares held by Shareholders holding more than 5 % of the aggregate shares in the Company
4 Nature of Security and Terms of repayment for Secured Borrowings
5. The above borrowings are secured by a first pari passu charge on entire current asset of the Company (namely Stocks, Bills Receivable and Book Debts) and all oer movables both present and future whether lying loose or in cases or which are stored in the factories, premises and godowns, situated at Kamarhatty and Kharagpur plant of the Company. Second pari passu charge on movable properties including moveable plant and machinery, machinery spares, tools and accessories etc. both present and future situated at Kamarhatty and Kharagpur plant of the Company.
6. Disclosures under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006
7. There are no amounts due for payment to the Investor Education and Protection Fund under Section 205C of the 1956 Act, as at the year end.
8. Provision for Warranty :
The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise - being typically up to one year.
As per the terms of the contracts, the Company provides post-contract services / warranty support to its customers. The Company accounts for the post-contract support / provision for warranty on the basis of the information available with the Management duly taking into account the current and past technical estimates.
* Amount is below the rounding off norm adopted by the Company.
9. Based on the valuation report submitted by the valuers appointed for the purpose, certain items of the Companyâs fixed assets (viz. Freehold and Leasehold Land, Buildings and Plant and Equipment) were revalued on 31st March 1993 after considering the following factors
- The then estimated current market value pertaining to Leasehold Land and Freehold Land and Buildings thereon.
- Value of Plant and Equipment based on their the then current cost of replacement.
- Adjustments for the then condition, the standard of maintenance, depreciation up to valuation date etc.
The resultant revaluation surplus of Rs. 2,472 Lakhs, arising from the aforesaid revaluation, were transferred to Revaluation Reserve as reflected in the Companyâs annual accounts for 1992-93.
10. Ownership of a flat (cost Rs. 39 Lakhs) belonging to the Company in a Co-operative Housing Society is registered in the name of the Managing Director of erstwhile Spundish Engineering Limited.
11. Capital Work in Progress includes borrowing costs Nil ( Previous Year Rs. 926 Lakhs).
12. Amounts in Bracket represent figures of Previous Years
13. Amounts in Bracket represent figures of Previous Years.
14. Details of Depreciation and Amortization Expenses
15. Technical Know-how [ shown under Intangible Assets - Note 13 ] represents technical drawings, designs etc. relating to manufacture of the Companyâs products acquired pursuant to various agreements conferring the right to manufacture and usage only.
16. Employee Benefits
The Company has recognized, in Statement of Profit and Loss for the year ended 31st March 2016 an amount of Rs. 76 Lakhs (Previous year Rs. 71 Lakhs) as expenses under defined contribution plans.
A) Provident Fund :
The Company has an obligation to fund any shortfall on the yield of the trustâs investments over the administered interest rates on annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors. Based on the final guidance for measurement of Provident Fund liabilities issued by the Actuarial Society of India, the Companyâs liability at the year end of Rs. 73 Lakhs (Previous year Rs. 165 Lakhs) has been actuarially determined by an independent authority. The Company has contributed for the year ended 31st March 2016 an amount of Rs. 202 Lakhs (Previous year Rs. 207 Lakhs) as Provident Fund.
B) Superannuation Fund :
(i) Certain eligible employees of the Company who had attained at least 45 years of age as on 1st April 2009 are entitled to Superannuation benefit under the Superannuation scheme (a funded Defined Benefit Plan under a common Trust-''Tractors India Limited Superannuation Fund Scheme'', being administered by the trustees of the said fund for the benefit of employees of the Company and its subsidiary Company i.e. Tractors India Private Limited). Under the aforesaid benefit scheme the Company makes periodic contribution to the Superannuation Fund Scheme and a predetermined percentage of salary is paid as pension on retirement. The quantum of pension depends on the average basic salary of eligible employee during the last 36 months before retirement. The benefit vests to employees with 12 years of continuous service and attainment of 48 years of age on retirement/death/termination. The most recent actuarial valuation of Plan Assets and Present Value of the Defined Benefit Obligation of Superannuation Fund was carried out as on 31st March 2016.
(ii) Employees who did not attain 45 years of age as on 1st April 2009 are under the purview of ''Defined Contribution Scheme'' in respect of service rendered from 1st April 2009. The benefit of services rendered by these employees up to 31st March 2009 come under the purview of ''Defined Benefit Scheme'' as indicated which is frozen as on 31st March 2009. Hence for this category of employees, the benefit on cessation of service will be :
a) amount accumulated by annual contribution of 15% of Basic Salary and
b) amount frozen as on 31st March 2009.
C) Gratuity Fund :
The Company makes periodic contributions to the Tractors India Limited Staff Gratuity Fund, a funded defined benefit-plan for qualifying employees administrated under a common Trust by the trustees of the said fund for the benefit of the employees of the Company and its subsidiary Company i.e. Tractors India Private Limited.
Under the Gratuity plan, every employee is entitled to gratuity, being higher of the amount, calculated under the Company''s plan (based on average salary of last 36 months and number of years of service, restricted to a maximum of 40 years) or calculations as laid down under the Payment of Gratuity Act, 1972. Gratuity is payable on death / retirement / termination and the benefit vests after 5 year of continuous service.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation was carried out as at 31st March 2016.
The expense for the Defined Benefits (referred to in para 27.1 and 27.2 above) are included in the line item under âContribution to Provident and other Fundsâ .
17. The basis used to determine overall expected rate of return on assets and the effect on major categories of Plan Assets is as follows :
The major portions of the Assets are invested in PSU Bonds, State and Central Government Securities. Based on the asset allocation and prevailing yield rates on these asset classes, the long term estimate of the expected rate of return on the fund assets have been arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching Government Bonds.
18. Miscellaneous expenses include Nil (Previous year Rs. 44 Lakhs) paid to TIL Welfare Trust which is considered to be Corporate Social Responsibility expense by the Company.
19. The Company has various residential / commercial premises taken under cancellable operating lease. Leases range for periods between 3 to 5 years. Terms of the lease include operating term for renewal, increase in rent for future periods, terms of cancellation etc. The operating lease payments for the year amount to Rs. 156 Lakhs (Previous Year Rs. 91 Lakhs). Additionally the Company also has cancellable operating lease contracts for certain Plant & Machinery, lease rental payments of which for the year amounts to Rs. 370 Lakhs (Previous year Rs. 408 Lakhs).
Future cash outflows in respect of the above matters are determinable only on receipts of judgments I decisions pending at various forums / authorities. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and result of operations.
20. Based on legal proceedings initiated by the Employees'' Union / Association and the interim order of the Hon''ble Calcutta High Court dated 22nd December 2006 and18th April 2007 restraining the Company from making any contribution / deduction towards Employees'' State Insurance in respect of its Kamarhatty (with effect from October 2006) and Taratolla (with effect from March 2007) units, in respect of employees whose monthly salaries (i.e. basic, dearness allowance and overtime) are between Rs.7,501 and Rs. 10,000, no contributions / deductions have been made and deposited with the appropriate authorities. The related amounts involved as on 31st March 2016 being Employer''s Rs. 4 Lakhs (Previous Year Rs. 4 Lakhs) and Employees'' Rs. 1 Lakh (Previous Year Rs. 1 Lakh).
21. Consequent to enhancement of Employees'' State Insurance benefit ceiling for ''Employee Wages'' from Rs. 10,000 to Rs. 15,000 per month with effect from 1st May 2010, legal proceedings have been initiated by the Employees'' Union / Association of the Company and an interim order dated 13th August 2010 has been issued by the Hon''ble Calcutta High Court in this regard, restraining the Company from making contribution / deduction towards Employees'' State Insurance in respect of employees whose monthly salaries (i.e. basic, dearness, allowance and overtime) are between Rs. 10,001 and Rs. 15,000. In view of the said Order, the Company has neither deducted from certain concerned employees nor contributed its own share to the Employees State Insurance Scheme with effect from 1st August 2010, the related amounts involved as on 31st March 2016 being Employer''s Rs. 3 Lakhs (Previous Year Rs. 3 Lakhs) and Employees Rs. 1 Lakh (Previous Year Rs. 1 Lakh).
22 Pursuant to a stay order obtained by the Company from the Hon''ble High Court, the Company has stopped paying further Tax on Imported goods into West Bengal, with effect from 1st January 2013. The related unpaid amount till 31st March 2016 Rs. 413 Lakhs (Previous Year Rs. 336 Lakhs).
23 The operations of the Company pertains only to Material Handling Solutions (i.e. manufacturing and marketing of various Material Handling Equipments namely Mobile Cranes, Port Equipments, Self Loading Truck Cranes, Road Construction Equipments, etc. and dealing in spares and providing services to related equipments). The Company has only one reportable segment as envisaged in Accounting Standard-17 on ''Segment Reporting'', hence information pertaining to segment is not applicable for the Company.
24 The Board of Directors of the Company, at its meeting held on 21st April 2016, has approved the sale of its Caterpillar Dealership Business as a going concern. The proposed sale process will be as follows:
i) Sale of shares in wholly owned subsidiary Tractors India Private Limited (TIPL) [Book value Rs. 9,585 Lakhs as on 31st March 2016] for a consideration of Rs. 35,000 Lakhs
ii) Sale of shares at the book value, in the wholly owned subsidiary Tractors Nepal Private Limited (TNPL) [Book value of Rs. 75 Lakhs as on 31st March 2016]
iii) Sale of specified assets and liabilities pertaining to the Caterpillar Dealership Business standing in the books of TIL Overseas Pte. Limited (TILO).
For this proposed sale the Company has executed a ''Term Sheetâ dated 9th April 2016 with Good earth Minetech Private Limited (GMPL) through its director Mr. Sunil Chaturvedi (presently the Managing Director of TIPL). Based on the aforesaid Term Sheet, the Company and GMPL is in process of finalizing a Share Purchase Agreement (SPA); as agreed in Term Sheet, the transaction needs to be completed on or before 30th June 2016, failing which the agreement shall come to an end and both the parties shall be relieved of their mutual obligations. The shareholders of the Company has approved the proposed sale through postal ballot, results of which were declared on 25th May 2016.
On completion of the transaction, TIPL and TNPL will cease to be a subsidiary of the Company on and from 1st April 2016, being the agreed upon date as mentioned in the Term Sheet signed between the Company and GMPL.
25. Previous year''s figures have been regrouped I reclassified wherever necessary to confirm with current year classification I disclosure.
Mar 31, 2012
1 CORPORATE MRNHMTMI
The Limited (the company) is engaged in manufacturing of a
comprehensive range of material handling lifting port and road
construction solutions with integrated customer support and after Sales
Service. Overall the Company's products and services are termed as
Materials Handling Solutions (MHS). The Company has two manufacturing
facilities - Kamarhatty and Kharagpur in West Bengal. The Company is a
Public Limited Company and is listed in Bombay, Calcutta and National
Stock Exchange in India.
2.1 Rights, Preferences and Restrictions attached to Equity Shares
The Company has one class of Equity Shares having a par value of Rs 10/-
per share. Each shareholder is eligible for one vote per share held.
The Dividend proposed by the Board of Directors is subject to the
approval of the Shareholders in the ensuing Annual General Meeting,
except in case of Interim Dividend. In the event of liquidation, the
Equity shareholders are eligible to receive the remaining assets of the
Company after distribution of all Preferential amounts, in proportion
to their shareholding.
3.1 The above borrowings are secured by a first pari passu charge on
all the current assets of the Company (namely Stocks, Bills Receivable
and Book Debts) and a second pari passu charge on all movable
(excluding such movables as may be agreed by Consortium Bankers from
time to time) fixed assets of the Company, both present and future and
on certain immovable properties of the Company under a joint deed of
hypothecation between the Company and its Consortium Bankers.
4.1 There are no outstanding dues to Micro and Small Enterprises based
on information available with the Company.
5.1 Provision for Warranty:
Warranty which hitherto were accounted during the period of incurrence
are now accounted for on accrual basis. As a result of this the profit
for the year is lower by Rs 70 lacs.
The estimated liability for product warranties is recorded when
products are sold. These estimates are established using historical
information on the nature, frequency and average cost of warranty
claims and management estimates regarding possible future incidence
based on corrective actions on product failures. The timing of outflows
will vary as and when warranty claim will arise - being typically up to
one year.
As per the terms of the contracts, the Company provides post-contract
services / warranty support to its customers. The Company accounts for
the post-contract support / provision for warranty on the basis of the
information available with the Management duly taking into account the
current and past technical estimates.
6.1 Based on the valuation report submitted by the valuers appointed
for the purpose, certain items of the Company's fixed assets (viz.
Freehold and Leasehold Land, Buildings and Plant and Equipment) were
revalued on 31st March,1993 after considering the following factors
- The then estimated current market value pertaining to Leasehold Land
and Freehold Land and Buildings thereon.
- Value of Plant and Equipment based on their the then current cost of
replacement.
- Adjustments for the then condition, the standard of maintenance,
depreciation up to valuation date etc.
The resultant revaluation surplus of Rs 2,472 Sacs, arising from the
aforesaid revaluation, were transferred to Revaluation Reserve as
reflected in the Company's annual accounts for 1992-93.
Depreciation on these revalued assets as calculated in the manner
includes an additional charge of Rs 15 lacs (Previous Year Rs 15 lacs)
and an amount equivalent to the additional charge has been transferred
to the Profit and Loss Account from Revaluation Reserve; The effective
depreciation rates (other than for leasehold land) are as per Schedule
XIV to the Companies Act, 195B.
6.2 Ownership of a flat (cost Rs 39 lacs) belonging to the Company in a
Co-operative Housing Society is registered in the name of the Managing
Director of erstwhile Spun dish Engineering Ltd.
6.3 Other adjustments represents borrowing cost capitalized during the
year Rs 342 lacs (Previous Year Nil),
6.4 The amount has been de-capitalized on a prudent basis due to
certain operational constraint regarding the usage of the land.
6.5 Capital Work in Progress includes borrowing costs Rs 397 lacs
(Previous Year Nil).
7.1 Technical Know-how represents technical drawings, designs etc.
relating to manufacture of the Company's products acquired pursuant to
various agreements conferring the right to manufacture and usage only.
8.1 Employee Benefits
The Company has recognized, in Statement of Profit and Loss for the
year ended 31st March, 2012 an amount of Rs 47 lacs (Previous year Rs 37
lacs) as expenses under defined contribution plans.
(A) Provident Fund
The company has an obligation to fund any shortfall on the yield of the
trust's investments over the administered interest rates on annual
basis. These administered rates are determined annually predominantly
considering the social rather than economic factors. Based on the final
guidance for measurement of Provident Fund liabilities issued by the
Actuarial Society of India, the Company's liability at the year end
of Rs 57 lacs has been actuarially determined by an independent
authority. The Company has contributed for the year ended 31st March
2012 an amount of Rs 172 lacs (Previous year Rs161 lacs) at Provident
Fund.
(B) Superannuation Fund :-
(i) Certain eligible employees of the Company who had attained at least
45 years of age as on 1 st April,2009 are entitled to Superannuation
benefit under the Superannuation scheme (a funded Defined Benefit
Planundera common Trust- Tractors India Limited Superannuation Fund
Scheme', being administered by the trustees of the said fund for the
benefit of employees of the Company and its subsidiary company i.e.
Tractors India Private Limited). Under the aforesaid benefit scheme the
Company makes periodic contribution to the Superannuation Fund Scheme
and a predetermined percentage of salary is paid as pension on
retirement. The quantum of pension depends on the average basic salary
of eligible employee during the last 36 months before retirement. The
benefit vests to employees with 12 years of continuous service and
attainment of 48 years of age on retirement/death/termination. The most
recent actuarial valuation of Plan Assets and Present Value of the
Defined Benefit Obligation of Superannuation Fund was carried out as on
31st March,2012,
(ii) Employees who did not attain 45 years of age as on 1st April,2009
are under the purview of 'Defined Contribution Scheme' in respect of
service rendered from 1st April,2009. The benefit of services rendered
by these employees up to 31st March,2009 come under the purview of
'Defined Benefit Scheme' as indicated which is frozen as on 31st
March,2009, Hence for this category of employees, the benefit of
cessation of service will be:
a) amount accumulated by annual contribution of 15% of Basic Salary and
b) amount frozen as on 31 st March,2009.
(C) Gratuity Fund :-
The Company makes periodic contributions to the Tractors India Limited
Staff Gratuity Fund, a funded defined benefit-plan for qualifying
employees administrated under a common Trust by the trustees of the
said fund for the benefit of the employees of the Company and its
subsidiary company i.e. Tractors India Private Limited,
Under the Gratuity plan, every employee is entitled to gratuity, being
higher of the amount, calculated under the Company's plan (based on
average salary of last 36 months and number of years of service,
restricted to a maximum of 40 years) or calculations as laid down under
the Payment of Gratuity Act, 1972. Gratuity is payable on death /
retirement / termination and the benefit vests after 5 year of
continuous service.
The most recent actuarial valuation of plan assets and the present
value of the defined benefit obligation was carried out as at 31st
March, 2012,
8.2 The basis used to determine overall expected rate of return on
assets and the effect on major categories of Plan Assets is as follows:
The major portions of the Assets are invested in PSU Bonds, State and
General Government Securities. Based on the asset allocation and
prevailing yield rates on these asset classes, the long term estimate
of the expected rate of return on the fund assets have been arrived at.
Assumed rate of return on assets is expected to vary from year to year
reflecting the returns on matching Government Bonds.
8.3 The estimate of future salary increases take into account
inflation, seniority, promotion and other relevant reasons.
9.1 Miscellaneous expenses include charge/(credit) on account of Loss
on Foreign Exchange (Net) of Rs 196 lacs (Previous year Gain of Rs 98
lacs)
9.2 The Company has various residential / commercial premises taken
under cancellable operating lease. Leases range for periods between 3
to 5 years. Terms of the lease include operating term for renewal,
increase in rent for future periods, terms of cancellation etc. The
operating lease payments for the year amount to Rs 100 lacs (Previous
Year Rs 108 lacs)
9.3 During the year, the Company commenced initial trial run followed
by commercial production (in March 2012) at the Kharagpur location.
Total capitalization of Rs 8,439 lacs (previous year Nil) against these
projects include following trial run expenses (net).
(Rs.in lacs)
10 CONTINGENT LIABILITIES IN RESPECT OF
As at
31.03.2012 As at
31.03.2011
a. Sales Tax Matters under dispute 1,509 369
[Related payments Rs 5
lacs (Previous year Rs 6 lacs)]
b. Income Tax Matters under dispute 303 176
[ Excludes disputed Income Tax
matters, in view of favorable Tribunal
decision in similar case].
[Related payments Rs 93 lacs (Previous
year Rs.48 lacs)]
c. Service Tax matters under dispute 1,213 1,314
[Related payments Rs Nil (Previous
year Rs.217 lacs)]
d. Excise Duty matters under dispute 48 85
[Related payments Rs 23 lacs
(Previous year Rs 23 lacs)]
The management believes that the 6 27
ultimate outcome of these proceedings
will not have a material adverse
effect on the Company's financial
position and result of operations.
11.1 Based on legal proceedings initiated by the Employees' Union /
Association and the interim order of the Hon'ble Calcutta High Court
dated 22nd December, 2006 and 18th April, 2007 restraining the Company
from making any contribution / deduction towards Employees' State
Insurance in respect of its Kamarhatty ( with effect from October,2006
) and Taratolla (with effect from March, 2007) units, in respect of
employees whose monthly salaries (i.e. basic, dearness allowance and
overtime) are between Rs 7,501 and Rs 10,000, no contributions /
deductions have been made and deposited with the appropriate
authorities. The related amounts involved as on 31st March, 2012 being
Employer's Rs 4 lacs (Previous Year Rs 7 lacs) and Employees' Rs 1 lacs
(Previous Year Rs 3 lacs),
11.2 Consequent to enhancement of Employees' State Insurance benefit
ceiling for 'Employee Wages' from Rs 10,000 to Rs 15,000 per month with
effect from 1 st May 2010, legal proceedings have been initiated by the
Employees' Union / Association of the Company and an interim order
dated 13th August, 2010 has been issued by the Hon'ble Calcutta High
Court in this regard, restraining the Company from making contribution
/ deduction towards Employees' State Insurance in respect of
employees whose monthly salaries (i.e. basic, dearness allowance and
overtime) are between Rs 10,001 and Rs 15,000. In view of the said Order,
the Company has neither deducted from the certain concerned employees
nor contributed its own share to the Employees State Insurance Scheme
with effect from 1st August 2010, the related amounts involved as on 31
March, 2012 being Employer's Rs 3 lacs (Previous Year Rs 1 lac) and
Employees' Rs 1 lac (Previous Year Rs 0.32 lacs).
12 Pursuant to the Scheme of Arrangement (the 'Scheme') under
Section 391 to 394 of the Companies Act between the Company i.e. TIL
Limited (the transferor Company) and its wholly owned subsidiary
Tractors India Private Limited (TIPL) (the transferee company), as
sanctioned by the Hon'ble High Court at Kolkata vide order dated 12th
July,2010, the undertaking of the Company pertaining to dealership
business of Caterpillar (comprising Construction and Mining Solutions
and Power System Solutions) has been transferred to and vested in TIPL
on a going concern basis with effect from the appointed date of 1st
April, 2010.
The said Scheme has been given effect to in the accounts for the year
ended 31st March 2011 in accordance with the said High Court order.
13 In terms of Accounting Standard (AS) 17 on 'Segment Reporting
notified in the Companies Act, 1956, Segment information has been
presented in the Consolidated Financial Statements [prepared pursuant
to Accounting Standard (AS) 21 on 'Consolidated Financial Statements
notified in the Companies Act, 1956] included in the annual report for
the year.
14 The Revised Schedule VI has become effective from 1st April, 2011
for the preparation of Financial Statements. This has significantly
impacted the disclosure and presentation made in the Financial
Statements. Previous year's figures have been regrouped / reclassified
wherever necessary to correspond with the current years'
classification / disclosure.
Mar 31, 2011
1. Ownership of a flat (cost Rs. 3,937 thousand) belonging to the
Company in a Co-operative Housing Society is registered in the name of
the Managing Director of erstwhile Spundish Engineering Ltd.
2. Contingent Liabilities in respect of -
(Rs. in 000)
As at 31.03.2011 As at 31.03.2010
2.1 Sales Tax Matters under dispute 36,298 6,546
[Net of payments Rs. 645
thousand (Previous year Rs. 3,243 thousand)]
2.2 Income Tax Matters under dispute 12,790 1,809
[Excludes disputed Income Tax matters,
in view of favourable Tribunal decision
in similar case.]
2.3 Service Tax matters under dispute [Net
of payments Rs. 1,463 thousand (Previous year 9,284 96,261
Rs. 20,208 thousand)]
2.4 Excise Duty matters under dispute 4,315 5,329
[Net of payments Rs. 2,918 thousand (Previous
year Rs. 1,648 thousand)]
3.1 Based on legal proceedings initiated by the Employees Union/
Association and the interim order of the Honble Calcutta High Court
dated 22nd December,2006 and 18th April,2007 restraining the Company
from making any contribution/ deduction towards Employees State
Insurance in respect of its Kamarhatty ( with effect from October,2006
) and Taratolla ( with effect from March, 2007) units, in respect of
employees whose monthly salaries (i.e.basic,dearness allowance and
overtime ) are between Rs. 7,501 and Rs. 10,000, no contributions/
deductions have been made and deposited with the appropriate
authorities. The related amounts involved as on 31st March, 2011 being
(Employers) Rs. 679 thousand (Previous Year Rs. 669 thousand) and
(Employees) Rs. 250 thousand (Previous Year Rs. 246 thousand).
3.2 Consequent to enhancement of Employees State Insurance benefit
ceiling for Employee Wages from Rs. 10,000 to Rs. 15,000 per month with
effect from 1st May 2010, legal proceedings have been initiated by the
Employees Union/ Association of the Company and an interim order dated
13th August, 2010 has been issued by the Honble Calcutta High Court in
this regard, restraining the Company from making contribution/
deduction towards Employees State Insurance in respect of employees
whose monthly salaries (i.e. basic, dearness allowance and overtime )
are between Rs. 10,001 and Rs. 15,000. In view of the said Order, the
Company has neither deducted from the certain concerned employees nor
contributed its own share to the Employees State Insurance Scheme with
effect from 1st August, 2010, the related amounts involved as on 31st
March, 2011 being (Employers) Rs. 87 thousand (Previous Year NIL) and (
Employees) Rs. 32 thousand (Previous Year NIL).
4. The Company has various residential/ commercial premises taken
under cancellable operating lease. Leases range for periods between 3
to 5 years. Terms of the lease include operating term for renewal,
increase in rent for future periods, terms of cancellation etc. The
operating lease payments for the year amount to Rs. 10,773 thousand
(Previous Year Rs. 18,572 thousand).
5. There are no outstanding dues for Micro and Small Enterprises
based on information available with the Company.
6. Technical Know-how [ shown under Intangible Assets - Schedule E
] represents technical drawings, designs etc. relating to manufacture
of the Companys products acquired pursuant to various agreements
conferring the right to manufacture and usage only.
7. Pusuant to the Scheme of Arrangement (the Scheme) under Section
391 to 394 of the Companies Act between the Company i.e. TIL Limited
(the transferor Company) and its wholly owned subsidiary Tractors India
Private Limited (TIPL) ( the transferee company), as sanctioned by the
Honble High Court at Calcutta vide order dated 12th July, 2010, the
undertaking of the Company pertaining to dealership business of
Caterpillar (comprising Construction and Mining Solutions and Power
Systems Solutions) has been transferred to and vested in TIPL on a
going concern basis with effect from the appointed date of 1st April,
2010, in consideration of 4489430 number of Equity Shares of TIPL at Rs.
10/- each at a premium of Rs. 203.48 per share fully paid up, amounting
to Rs. 958,396 thousand, on a slump sale basis.
8.1 Sales-others [Note 22.2(i) below] represents Service Income Rs.
25,080 thousand (Previous Year Rs. 236,933 thousand).
8.2 Provident Fund :- In terms of the Guidance on implementing
Accounting Standard(AS) 15 on Employee Benefits issued by the
Accounting Standards Board of the Institute of Chartered Accountants of
India, a provident fund set up by the Company is treated as a defined
benefit plan since the Company is obligated to meet interest shortfall,
if any. However, at the year end, no shortfall remains unprovided for.
The Actuary has expressed his inability to provide an actuarial
valuation of the provident fund liability as at the year end in the
absence of any guidance from the Actuarial Society of India.
Accordingly, complete information required to be considered as per AS
15 in this regard are not available and the same could not be
disclosed. During the year, the Company has contributed Rs. 11,798
thousand (Previous year Rs. 17,974 thousand) to the Provident Funds.
8.3 A) Superannuation Fund :-
(i) Certain eligible employees of the Company who had attained at least
45 years of age as on 1st April, 2009 are entitled to Superannuation
benefit under the Superannuation scheme (a funded Defined Benefit Plan
under a common Trust- Tractors India Limited Superannuatiion Fund
Scheme, being administered by the trustees of the said fund for the
benefit of employees of the Company and its subsidiary company i.e.
Tractors India Private Limited). Under the aforesaid benefit scheme the
Company makes periodic contribution to the Superannuation Fund Scheme
and a predetermined percentage of salary is paid as pension on
retirement. The quantum of pension depends on the average basic salary
of eligible employee during the last 36 months before retirement. The
benefit vests to employees with 12 years of continious service and
attainment of 48 years of age on retirement/death/termination. The most
recent actuarial valuation of Plan Assets and Present Value of the
Defined Benefit Obligation of Superannuation Fund was carried out as on
31st March,2011.
(ii) Employees who did not attain 45 years of age as on 1st April,2009
are under the purview of Defined Contribution Scheme in respect of
service rendered from 1st April, 2009. The benefit of services rendered
by these employees upto 31st March, 2009 come under the purview of
Defined Benefit Scheme as indicated in Note 18.3 (i) above, which is
frozen as on 31st March, 2009. Hence for this category of employees,
the benefit of cessation of service will be:
a) amount accumulated by annual contribution of 15% of Basic Salary and
b) amount frozen as on 31st March, 2009.
B) Gratuity Fund :- The Company makes periodic contributions to the
Tractors India Limited Staff Gratuity Fund, a funded defined
benefit-plan for qualifying employees administrated under a common
Trust by the trustees of the said fund for the benefit of the employees
of the Company and its subsidiary company i.e. Tractors India Private
Limited.
Under the Gratuity plan, every employee is entitled to gratuity, being
higher of the amount, calculated under the Companys plan (based on
average salary of last 36 months and number of years of service,
restricted to a maxmimum of 40 years) or calculations as laid down
under the Payment of Gratuity Act, 1972. Gratuity is payable on death/
retirement/ termination and the benefit vests after 5 year of
continuous service.
The most recent actuarial valuation of plan assets and the present
value of the defined benefit obligation was carried out as at 31st
March, 2011.
8.4 The basis used to determine overall expected rate of return on
assets and the effect on major categories of Plan Assets is as follows
:
The major portions of the Assets are invested in PSU Bonds and Special
Deposits. Based on the asset allocation and prevailing yield rates on
these asset classes, the long term estimate of the expected rate of
return on the fund assets have been arrived at. Assumed rate of return
on assets is expected to vary from year to year reflecting the returns
on matching Government Bonds.
8.5 The estimate of future salary increases takes into account
inflation, seniority, promotion and other relevant reasons.
8.6 In respect of the Companys Defined Benefit plans pertaining to
Gratuity and Superannuation benefit schemes for employees transferred
to TIPL in terms of the Scheme of Arrangement, as indicated in Note 13
above, the present value of obligation as on 1st April, 2010 have been
worked out by an independent actuary based on relevant information
related to each such employees.
The fair value of plan assets pertaining to the Company as on 1st
April, 2010 in respect of Gratuity and Superannuation benefit scheme
funds, being maintained by Tractors India Limited Staff Gratuity Fund
and Tractors India Limited Superannuation Fund respectively have been
bifurcated by the Trustees of the related funds in proportion to the
present value of the obligation as determined by the independent
actuary as referred above.
9. In terms of Accounting Standard (AS) 17 on Segment Reporting
notified in the Companies Act, 1956, Segment information has been
presented in the Consolidated Financial Statement [prepared persuant to
Accounting Standard (AS) 21 on Consolidated Financial Statement
notified in the Companies Act, 1956] included in the annual report for
the year.
10. Related Party Disclosure in keeping with Accounting Standard 18 on
"Related Party Disclosures". A) List of Related Parties
Subsidiaries Myanmar Tractors Limited
Tractors Nepal Private Limited
TIL Overseas Pte. Limited
Tractors India Private Limited Key Management Personnel Mr. A.
Mazumdar( Chairman and Whole time Director)
Mr. S. Mazumder( Vice Chairman & Managing Director)
Mr. S K Bhatnagar( Whole time Director - Appointed w.e.f. 1st April,
2010)
With the exception of Cranes/ Carrier Units ( Trucks), Earthmoving
Equipment,Diesel Generating Sets and Self-Propelled Rubber Tyred
Container Handling Mobile Crane mentioned above ,none of the items
included in the above classes of goods exceeded individually 10% of the
total value of Purchases, Stock or Turnover and accordingly
quantitative information has not been provided for.
11. The figures for the current year are not comparable with those of
the previous year (which have been rearranged/regrouped wherever
necessary),as the figures for the previous year include transactions
relating to the transferred undertaking pertaining to dealership
business of Caterpillar, as referred to in Note 13.
Mar 31, 2010
1. Based on the valuation report submitted by the valuers appointed
for the purpose, certain items of the Companys fixed assets (viz.
Freehold and Leasehold Land, Freehold and Leasehold Buildings and Plant
and Machinery) were revalued on 31st March,1993 after considering the
following factors :-
- The then estimated current market value pertaining to Leasehold Land
and Freehold Land and Buildings thereon.
- Value of Plant and Machinery based on their the then current cost of
replacement.
Adjustments for the then condition, the standard of maintenance,
depreciation up to valuation date etc. The resultant revaluation
surplus of Rs. 247,234 thousand arising from the aforesaid revaluation
were transferred to Revaluation Reserve as reflected in the Companys
annual accounts for 1992-93.
Depreciation on these revalued assets as calculated in the manner
indicated in Note 2.3(b) above includes an additional charge of Rs.
1,545 thousand (Previous Year Rs. 1,545 thousand)and an amount
equivalent to the additional charge has been transferred to the Profit
and Loss Account from Revaluation Reserve; such transfer, according to
an authoritative professional view being acceptable for the purpose of
the Companys annual accounts. In consequence, the effective
depreciation rates (other than leasehold land) are as per Schedule XIV
to the Companies Act, 1956.
2. Ownership of a flat (cost Rs. 3,937 thousand) belonging to the
Company in a Co-operative Housing Society is registered in the name of
the Managing Director of erstwhile Spundish Engineering Ltd.
3. Contingent Liabilities in respect of
(Rs. 000)
As at 31.03.2010 As at 31.03.2009
3.1 Sales Tax Matters under
dispute 6,546 4,046
[Net of payments Rs. 3,243
thousand (Previous year Rs.
300 thousand)]
3.2 Income Tax Matters under
dispute 1809* 2028*
* Excludes disputed Income
Tax matters, in view of
favourable Tribunal decision
in similar case.
3.3 [Service Tax matters under
dispute 96,261 12,056
[Net of payments Rs. 20,208
thousand (Previous year Rs.
9,807 thousand)]
3.4 Excise Duty matters under
dispute , 5,329 8,507
[Net of payments Rs. 1,648
thousand (Previous year Rs.
1,648 thousand)]
4. Guarantees
4.1 Bank Guarantees Majrjding 337,816 361,545
4.2 Corporate Guarantee given
behalf of Overseas sjdjajies
Limit 298,980 307,308
Amount outstanding at year-end Nil Nil
year Rs. 20,358 thousand)] 18,566 57,960
5. Based on legal proceedings initiated by the Employees Union/
Association and the interim order of the Honble Calcutta High Court
dated 22nd December, 2006 and 18th April, 2007 restraining the Company
from making any contribution/ deduction towards Employees State
Insurance in respect of its Kamarhatty (with effect from October 2006)
and Taratolla (with effect from March 2007) units, in respect of
employees whose monthly salaries (i.e. basic, dearness allowance and
overtime) are between Rs. 7,501 and Rs. 10,000, no contributions/
deductions have been made and deposited with the appropriate
authorities. The related amounts involved as on 31st March, 2010 being
(Employers) Rs. 669 thousand (Previous Year Rs. 568 thousand) and
(Employees) Rs. 246 thousand (Previous year Rs. 209 thousand).
5.1 The Company has taken various residential/commercial premises
under cancellable operating lease. Leases range for periods between 3
to 5 years. Terms of the lease include operating term for renewal,
increase in rent for future periods, terms of cancellation etc. The
operating lease payments for the year amount to Rs. 18,572 thousand
(Previous year Rs. 11,811 thousand).
5.2 The Company has given various Plant and Machinery (namely Diesel
Generating Sets, Machines etc.) under cancellable operating leases.
Leases range for periods between 6 months to 3 years. Terms of lease
include terms for renewal, cancellation etc. Initial Direct costs
(commissioning, installation etc.) for such assets are borne by the
lessee, other than transportation cost, which is borne by the Company
and charged off to revenue. Lease rentals recognised as income during
the year Rs. 188,735 thousand (Previous Year Rs. 130,528 thousand).
Other details for such Plant and Machinery are as below.
6 There are no outstanding dues for micro and small enterprises based
on information available with the Company.
7 Technical Know-how [shown under Intangible Assets - Schedule E]
represents technical drawings, designs etc. relating to manufacture of
the Companys products and acquired pursuant to various agreements
conferring the right to manufacture and usage only.
8 The Company has certain long-term composite maintenance contracts
with a party which entails, inter alia, supply of spare parts. The
billing/payment schedule is time phased. Pending supply of spare parts,
related amount of Rs. 17,078 thousand (Previous year Rs. 9,519
thousand) billed during the year as per the payment schedule of the
aforesaid contract, has been considered as liability and the related
sales will be recognised on supply of spares, as and when required,
under the said contracts, in future in keeping with the accounting
policies set out in Note 2.1 above. During the year an amount of Rs.
95,005 thousand (Previous year Rs. 11,629 thousand) has been released
from the accumulated liabilities in this regard on a prudent basis and
adjusted against related contractual dues.
9 Sales-others [Note 23.2(g) below] include Service Income Rs.
236,933 thousand (Previous Year Rs. 161,467 thousand).
9.1 Excise Duty is net of Nil (Previous Year Rs. 15,185 thousand) on
account of accrued duty benefit for the year pertaining to Export/
Deemed Exports.
10. The Company had allotted on 28th December, 2007,on a preferential
basis, to the Indian promoter group and certain other companies/
entities/ persons 2,993,842 number of Convertible Equity Warrants
against receipt of 10% of the consideration of Rs. 326/- per Warrant,
determined in keeping with the related Securities and Exchange Board of
India (SEBI) Guidelines. Each Warrant was convertible into one equity
Share of nominal value of Rs. 10/- each at a price of Rs. 326/- per
share in lots at the option of the warrant holders within eighteen
months from the date of allotment in accordance with relevant SEBI
Guidelines and the terms of the issue, upon payment of balance
consideration by the warrant holders.
Out of the said 2,993,842 number of convertible Equity Warrants, the
Company upon realisation of balance consideration and exercise of
conversion option by certain warrant holders (out of the Indian
Promoter Group), issued and allotted in March, 2008,300,135 number of
Equity Shares of Rs. 10/- each at a premium of Rs. 316/- per share
against conversion of equivalent number of Equity Warrants.
The stipulated period to exercise the option by aliotees of remaining
2,693,707 number of convertible Equity Warrants expired during the
current year and accordingly the said Equity Warrants were forfeited
and the10% of the consideration amount received against such allotment
amounting to Rs. 87,815 thousand has been forfeited and credited to
Capital Reserve Account.
10.2 Provident Fund :-
In terms of the Guidance on implementing Accounting Standard (AS) 15 on
Employee Benefits issued by the Accounting Standards Board of the
Institute of Chartered Accountants on India, a provident fund set up by
the Company is treated as a defined benefit plan since the Company is
obligated to meet interest shortfall, if any. However, at the year
end, no shortfall remains unprovided for. The Actuary has expressed his
inability to provide an actuarial valuation of the provident fund
liability as at the year end in the absence of any guidance from the
Actuarial Society of India. Accordingly, complete information required
to be considered as per AS 15 in this regard are not available and the
same could not be disclosed. During the year, the Company has
contributed Rs. 17,974 thousand (Previous year Rs. 15,334 thousand) to
the Provident Funds.
10.3 A. Superannuation Fund :-
Up to 31st March, 2009 all eligible employees of the Company were
entitled to Superannuation under the Companys Superannuation Scheme
(a defined benefit plan). Under the aforesaid scheme, the Company
makes periodic contribution to the Tractors India Limited Super
annuation Funds Scheme (a funded defined benefit plan) and a
predetermined percentage of salary is paid as pension on retirement.
The quantum of pension depends on the average basic salary of the
eligible employee during the last thirty six months before retirement.
The benefit vest to employees with twelve year of continuous service
and attainment of forty eight years of age on retirement/ death/
termination.
The most recent actuarial valuation of plan assets and the present
value of the defined benefit obligation of superannuation fund were
carried out as on 31st March, 2010. However with effect from 1st
April, 2009 the Board of Trustees of the Fund with the consent of
the Companys Management has amended the aforesaid Superannuation
Scheme as follows:
(i) Members who have attained at least 45 years of age as on 1st April,
2009 would continue to remain under the purview of the Defined Benefit
Scheme.
(ii) Members who have not attained 45 years of age as on 1st April,
2009 will come under the purview of Defined Contribution Scheme in
respect of services rendered with effect from 1st April, 2009. The
benefit of services rendered till 31st March, 2009 under the Defined
Benefit Scheme based on pensionable salary as on 31st March, 2009 will
be frozen. Thus for this category of employees, the benefit on
cessation of service will be (a) Amount accumulated by annual
contribution at 15% of basic salary and (b) amount frozen as on 31 st
March, 2009. In view of the aforesaid change the charge for the year in
respect of superannuation scheme is lower by Rs.17,109 thousand with
corresponding favourable impact on the profit before tax for the year.
B. Gratuity Fund :-
The Company makes periodic contributions to the Tractors India Limited
Staff Gratuity Fund, a funded defined benefit-plan for qualifying
employees. Under the Gratuity plan, every employee is entitled to
gratuity, being higher of the amount, calculated under the Companys
plan (based on last drawn salary and year of service) or calculations
as laid down under the Payment of Gratuity Act, 1972. Gratuity is
payable on death/ retirement/ termination and the benefit vests after 5
years of continuous service.
The most recent actuarial valuation of plan assets and the present
value of the defined benefit obligation were carried out as at 31st
March, 2010.
11. The basis used to determine overall expected rate of return on
assets and the effect on major categories of Plan Assets is as follows:
The major portions of the Assets are invested in PSU Bonds and Special
Deposits. Based on the asset allocation and prevailing yield rates on
these asset classes, the long term estimate of the expected rate of
return on the fund assets have been arrived at. Assumed rate of return
on assets is expected to vary from year to year reflecting the returns
on matching Government Bonds.
11.1 The estimate of future salary increases take into account
inflation, seniority, promotion and other relevant reasons.
12. Information given in accordance with the requirements of
Accounting Standard 17 on "Segment Reporting" :-
The Companys business segments are organised on product lines as
follows:
Material Handling Solutions (MHS) - engaged in manufacturing and
marketing of various Material Handling Equipment namely Mobile Cranes,
Port Equipment (Reach stacker, Level Luffing Cranes), Self Loading
Truck Cranes etc. and dealing in spares and providing services to
related equipment.
Construction & Mining Solutions (CMS) - engaged as a dealer for
Caterpillar Iric. USA for their earthmoving, construction mining
equipments, spares etc. and providing related services in Eastern and
Northern India and Bhutan.
Power Systems Solutions (PSS) - engaged in assembly, supply, erection
and commissioning of Generating Sets powered by Caterpillar engines and
dealing in spares and providing related services in Eastern and
Northern India and Bhutan.
Other represents all unallocated expenditure and includes expenses
incurred on common services provided to the segments which are not
directly identifiable to the individual segments as well as expenses
incurred at the corporate level which relate to the Company as a whole.
There has been no inter segment revenue during the year.
The Company operates predominantly within the geographical limits of
India, accordingly secondary segments have not been considered.
13. Related Party Disclosure in keeping with Accounting Standard 18 on
"Related Party Disclosures":-
a) List of Related Parties
Subsidiaries Myanmar Tractors Limited
Tractors Nepal Private Limited TIL Overseas Pte. Limited Tractors India
Private Limited
Key Management Personnel Mr. A. Mazumdar (Chairman and Whole time
Director)
Mr. S. Mazumder (Vice Chairman & Managing Director)
14. The Board of Directors has approved a Scheme of Arrangement under
Sections 391 to 394 of the Companies Act for transfer with effect from
1 st April, 2010 of the undertaking of the Company pertaining to
dealership business of Caterpillar (comprising Construction and Mining
Solutions and Power System Solutions) on a going concern basis to
Tractors India Private Limited (TIPL) a wholly owned subsidiary of TIL
Limited (in consideration for 44,89,430 nos of equity shares of Rs.
10/- each at a premiun of Rs, 203.48 each of TIPL aggregating to Rs.
958,396 thousand). The aforesaid Scheme of Arrangement has been
approved by the Board of Directors of TIPL and by the Shareholders of
TIL Limited and final approval from the Honble High Court of Kolkata
is pending.
15. Previous years figures have been rearranged/ regrouped wherever
necessary.
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