Notes to Accounts of Tinplate Company of India Ltd.
Mar 31, 2023
Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised in the balance sheet when the
Company has a present obligation (legal or constructive)
as a result of a past event, which is expected to result in
an outflow of resources embodying economic benefits
which can be reliably estimated. Each provision is
based on the best estimate of the expenditure required
to settle the present obligation at the balance sheet
date. When appropriate, provisions are measured on
a discounted basis. Provisions are not recognised for
future operating losses.
Constructive obligation is an obligation that derives from
an entity''s actions where:
(a) by an established pattern of past practice,
published policies or a sufficiently specific current
statement, the entity has indicated to other parties
that it will accept certain responsibilities and
(b) as a result, the entity has created a valid expectation
on the part of those other parties that it will
discharge those responsibilities.
ii) Contingent Liabilities and Assets
Contingent liability is a possible obligation that arises
from past events and the existence of which will be
confirmed only by the occurrence or non-occurrence of
one or more uncertain future events not wholly within
the control of the company, or is a present obligation that
arises from past events but is not recognised because
either it is not probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation, or a reliable estimate of the amount of the
obligation cannot be made. These are reviewed at each
balance sheet date and adjusted to reflect the current
best estimates. Contingent liabilities are disclosed
in the Notes. "
Contingent assets usually arise from unplanned or other
unexpected events that give rise to the possibility of an
inflow of economic benefits to the entity. Contingent
assets are not recognised in financial statements since
this may result in the recognition of income that may
never be realised. However, when the realisation of
income is virtually certain, then the related asset is not a
contingent asset and its recognition is appropriate.
Company as a Lessee
The Company assesses whether a contract is or contains a
lease, at inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for
consideration.
The Company recognises a right-of-use asset ("ROU") and
a corresponding lease liability with respect to all lease
arrangements in which it is the lessee at the date at which
the leases asset is available for use by the Company, except
for leases with a term of twelve months or less (short-term
leases) and leases of low-value assets. Contracts may contain
both lease and non-lease components. The Company
allocates the consideration in the contract to the lease and
non-lease components based on their relative stand-alone
prices. Payments associated with short term leases and all
leases of low-value assets are recognised on a straight-line
basis as an expense in the Statement of Profit and Loss over
the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits
from the leased asset are consumed.
Assets and liabilities arising from a lease are initially measured
on a present value basis. Lease liabilities include the net
present value of the following lease payments:
(i) fixed payments (including in-substance fixed payments),
less any lease incentives receivable,
(ii) variable lease payment that are based on an index or a
rate, initially measured using the index or rate as at the
commencement date,
(iii) amounts expected to be payable by the Company under
residual value guarantees,
(iv) the exercise price of a purchase option if the Company is
reasonably certain to exercise that option, and
(v) payments of penalties for terminating the lease, if the
lease term reflects the Company exercising that option.
The lease payments are discounted using the interest rate
implicit in the lease. If that rate can not be readily determined,
which is generally the case for leases in the Company, the
lessee''s incremental borrowing rate is used, being the rate that
the individual lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment with similar terms,
security and conditions.
The Company is exposed to potential future increase in
variable lease payments based on an index or rate, which
are not included in the lease liability until they take effect.
The lease liability will be reassessed and adjusted against the
right-of-use of asset as and when such changes takes effect.
Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to the profit or loss
over the lease period so as to produce a constant periodic rate
of interest on the remaining balance of the liability for each
period. Lease liabilities are remeasured with a corresponding
adjustment to the related right-of-use asset if the company
changes its assessment of whether it will exercise an extension
or a termination option.
The right-of-use assets comprise the initial measurement of
the corresponding lease liability, lease payments made at or
before the commencement day, any initial direct costs and
restoration costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses. Right-of-
use assets are depreciated from the commencement date on a
straight-line basis over the shorter of the lease term and useful
life of the underlying asset.
Lease liability and right-of-use asset (ROU) have been
separately presented in the Balance Sheet and lease payments
have been classified as financing cash flows.
Leases for which the company is a lessor is classified either as a
finance or an operating lease. Whenever the terms of the lease
transfers substantially all the risks and rewards incidental to
ownership of an underlying asset to the lessee, the contract
is classified as a finance lease. All other leases are classified as
operating leases.
For operating leases, rental income is recognized on a straight
line basis over the term of the relevant lease.
The Company did not need to make any adjustment to the
accounting for assets held as lessor as a result of adopting the
new leasing standard
2.14 Employee BenefitsA. Short-term Employee Benefits
Liability in respect of short term employee benefit that
are expected to be settled wholly within 12 months after
the end of the period in which the employees render
the related service are recognised at the amount of
the benefits expected to be paid when the liabilities
are settled. The liabilities are presented as "Provisions
for employee benefits" within ''Current Provisions'' in
the balance sheet.
B. Post Employment Benefit Plans
Defined Contribution Plans
Contributions under Defined Contribution Plans payable
in keeping with the related schemes are recognised
as expenses for the year in which the employee has
rendered the service.
Defined Benefit Plans
The present value of defined benefit obligations are
ascertained by an independent actuarial valuation using
Projected Unit Credit Method as per the requirement
of Ind AS 19 - Employee Benefits. The liability / (asset)
recognised in the Balance Sheet is the present value of
the defined benefit obligations on the balance sheet
date less the fair value of the plan assets (for funded
plans), together with adjustments for unrecognized
past service costs. Measurements, comprising of
actuarial gains and losses, the effect of the asset ceiling
(excluding amounts included in net interest on the net
defined benefit liability) and the return on plan assets
(excluding amounts included in net interest on the net
defined benefit liability), are recognised immediately in
the balance sheet with a corresponding debit or credit to
retained earnings through OCI in the year in which they
occur. Measurements are not reclassified to profit or loss
in subsequent years.
C. Other Long-term Employment Benefits
(unfunded)
Long Service Award
The present value of obligation against long-term
employee benefits is ascertained by an independent
actuarial valuation using Projected Unit Credit Method
as per the requirement of Ind AS 19 - Employee Benefits.
All actuarial gains and losses and past service cost
are recognised in the Statement of Profit and Loss as
applicable in the year in which they occur.
Compensated Absences
Compensated absences which are not expected to be
settled within twelve months after the end of the year
in which the employee renders the related service are
recognised based on actuarial valuation at the present
value of the obligation as on the reporting date.
The benefits are discounted using the appropriate
market yields at the end of the reporting year that
have terms approximating to the terms of the related
obligation. Remeasurement as a result of experience
adjustment and changes in actuarial assumptions are
recognised in the statement of profit and loss.
Financial assets and financial liabilities are recognised when
the company become a party to the contractual provisions of
the instruments.
Financial assets and financial liabilities are initially measured
at fair value. Transaction cost that are directly attributable
to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to
or deducted from the fair value of the financial assets or
financial liabilities, as appropriate on initial recognition.
Transaction cost directly attributable to the acquisition of
financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in the Statement
of Profit and Loss.
A Investments and Other Financial Assets
(i) Classification
The Company classifies its financial assets in the
following measurement categories:-
⢠Those to be measured subsequently at fair value
(either through comprehensive income or through
profit or loss), and
⢠Those to be measured at amortised cost
The classification depends on the company''s business
model for managing financial assets and the contractual
terms of cash flows.
(ii) Measurement
At initial recognition, the Company measures a financial
asset (excluding trade receivables which do not contain a
significant financing component) at its fair value plus, in
the case of a financial asset not at fair value through profit
or loss, transaction costs that are directly attributable to
the acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or loss
are expensed in profit or loss.
Financial Assets measured at Amortized Cost
Financial assets are measured at amortized cost if these
financial assets are held with a business model to hold
these assets in order to collect contractual cash flows
and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial Assets measured at Fair Value
Financial assets are measured at fair value through other
comprehensive income if these financial assets are held
within a business model to hold these assets in order to
collect contractual cash flows and to sell these financial
assets and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
The Company in respect of equity investments which
are not held for trading has made an irrevocable election
to present in other comprehensive income. Such an
election is made by the Company on an instrument by
instrument basis at the time of initial recognition of fair
value changes of such equity investments. Subsequent
changes in the fair value of such equity instruments are
taken through other comprehensive income.
Financial asset not measured at amortized cost or at fair
value through other comprehensive income is carried
at fair value through profit or loss. A gain or loss on
such assets that is subsequently measured at fair value
through profit or loss is recognised in the statement of
profit and loss.
(iii) Impairment of Financial Assets
Loss allowance for expected credit losses, assessed on a
forward looking basis, is recognized for financial assets
measured at amortized cost and fair value through other
comprehensive income.
The Company recognises life time expected credit losses
for all trade receivables that do not constitute a financing
transaction. For financial assets whose credit risk has
not significantly increased since initial recognition,
loss allowance equal to twelve months expected credit
losses is recognised. Loss allowance equal to the lifetime
expected credit losses is recognised if the credit risk on
the financial instruments has significantly increased
since initial recognition.
(iv) De-Recognition of Financial Assets
A financial asset is derecognised only when
⢠The Company has transferred the rights to receive
cash flows from the financial asset or
⢠retains the contractual rights to receive the
cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one
or more recipients.
Where the Company has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership of
the financial asset. In such cases, the financial asset is
derecognised. Where the Company has not transferred
substantially all risks and rewards of ownership
of the financial asset, the financial asset is not
derecognised.
Where the Company has neither transferred a financial
asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is
derecognised if the Company has not retained control
of the financial asset.
Where the Company retains control of the financial asset,
the asset is continued to be recognised to the extent of
continuing involvement in the financial asset.
B Financial Liabilities and Equity Instruments
(i) Classification as Debt or Equity
Financial liabilities and equity instruments issued
by the company are classified according to the
substance of the contractual arrangements entered
into and the definitions of a financial liability and an
equity instruments.
(ii) Measurement
Equity Instruments
An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all its liabilities. Equity instruments
are recognised at the proceed received, net of
direct issue cost.
Financial Liabilities
Trade and other payables represent liabilities for
goods and services provided to the Company
prior to the end of financial year which are unpaid.
Trade and other payables are presented as current
liabilities unless payment is not due within 12
months after the reporting year. Trade and other
payables are initially measured at fair value, net of
transaction costs, and are subsequently measured
at amortised cost, using the effective interest
rate method where the time value of money
is significant.
Interest-bearing bank loans, overdrafts and issued
debt are initially measured at fair value and are
subsequently measured at amortised cost using
the effective interest rate method. Any difference
between the proceeds (net of transaction costs)
and the settlement or redemption of borrowing is
recognised over the term of the borrowings in the
statement of profit and loss.
(iii) De-Recognition of Financial Liabilities
The company derecognised financial liabilities
when and only when the Company''s obligation
are discharged, cancelled or they expire.
2.16 Foreign Currency Transactions
The financial statements of the Company are presented in
Indian Rupee, which is the functional currency of the company
and the presentation currency for the financial statements.
Transactions in foreign currencies are initially recognised in
reporting currency i.e. Indian Rupees, by using the exchange
rates prevailing on the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are translated
at the rates of exchange prevailing at the reporting date.
The exchange differences arising on the settlement of
transactions and from the translation of monetary assets
& liabilities denominated in foreign currencies at year end
exchange rates are recognised in the Statement of Profit
and Loss. Foreign exchange gains and losses presented in
the Statement of Profit and Loss on a net basis within "Other
Income/ Other Expenses.
Non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates at
the date when the fair value was determined. Translation
differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss.
2.17 Derivative Financial Instruments
The Company uses derivative financial instruments such as
forward foreign exchange contracts, to safeguard its risks
associated with foreign exchange fluctuations. Such derivative
financial instruments are used as risk management tools and
not for speculative purposes. The Company enters into certain
derivative contracts to hedge risk which are not designated
as hedges. Derivatives are initially recognised at fair value
at the date of derivative contracts being entered into and
are subsequently measured at fair value at the end of each
reporting period, with changes included in "Other Income/
Other Expenses".
Trade receivables are amount receivable from customers
for goods sold or services rendered in the ordinary course
of business. Trade receivables are recognised initially at the
amount of considerations that is unconditional. The Company
holds the trade receivables with the objective of collecting
the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest
method, less loss allowance.
2.19 Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand/ deposits
held at call with banks and other short term deposits with
original maturities of three month or less which are readily
convertible into known amount of cash and are subject to
insignificant risk of change in value.
2.20 Earnings Per Share(i) Basic Earning per share
The basic earnings per share is computed by dividing
the net profit or loss attributable to the owners for
the year by the weighted average number of equity
shares outstanding during the year, adjusted for bonus
elements in equity shares, if any issued during the year.
(ii) Diluted earning per share
Diluted earnings per share adjusts the figures used in
the determination of basic earning per share to take
into account the after income tax effect of interest and
other financing costs associated with dilutive potential
equity shares and the weighted average number
of additional equity shares that would have been
outstanding assuming the conversion of all dilutive
potential equity shares.
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision
maker. The chief operating decision maker is responsible
for allocating resources and assessing performance of the
operating segments and has been identified as the Managing
Director of the Company. The accounting policies adopted for
the segment reporting are in line with the accounting policies
of the Company. Refer Note 39.
Government grants are recognized at its fair value, when
there is a reasonable assurance that the company will comply
with the conditions attaching to them and that the grants
will be received.
Government grants relating to income are deferred and
recognised in the Statement of Profit and Loss over the year
necessary to match them with the costs that they are intended
to compensate and presented within Other Operating Income.
Government grants relating to the purchase of property, plant
and equipment are included in liabilities as deferred income
and are credited to the Statement of Profit and Loss on a
straight line basis over the expected lives of the related assets
or other systematic basis representative of the fulfillment of
obligation associated with the grant received and presented
within Other Operating Income.
2.23 Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount
is reported in the Balance Sheet where there is a legally
enforceable right to offset the recognised amounts and there
is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously. The legally enforceable
right must not be contingent on future events and must
be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the company or
the counterparty.
All amounts disclosed in the financial statements and notes
have been rounded off to the nearest lakhs (with two places
of decimal) as per the requirement of Schedule III, unless
otherwise stated.
Mar 31, 2022
(i) Site & Water, Drainage System and Building (except at Kolkata) are on leasehold land.
(ii) Title deeds of all the immovable properties comprising of land and buildings which are freehold and leasehold land as disclosed above, are held in the name of the company.
(iii) Aggregate amount of depreciation has been included under "Depreciation and Amortisation expense" in the Statement of Profit and Loss (Refer Note 27).
(iv) Refer Note 35 for disclosure of contractual commitments for the acquisition of Property, plant and equipments.
(v) No proceedings have been initiated on or are pending against the company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) [formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)] and Rules made thereunder.
(iii) The Company has certain board approved ongoing capital projects which are delayed from the approved timeline for completion. The Key reasons for delay include impact of the COVID-19 pandemic, finalization of vendors, site related technical issues, etc. The Company has adequate controls for monitoring the status of capital projects on a periodic basis, such as management review at different levels and reporting to the Board.
The management has reviewed and has sufficient reasons to believe that there is no indication of impairment or obsolescence with respect to such delayed projects.
(i) Aggregate amount of amortisation has been included under "Depreciation and Amortisation expense" in the Statement of Profit and Loss (Refer Note 27).
(ii) Refer Note 35 for disclosure of contractual commitments for the acquisition of intangible assets.
The Company as a lessee
The Company has lease contracts for certain items of plant and equipment, offices, guest houses and leased land. Leases of plant and equipment have lease terms around 12 - 20 years, while offices and guest houses generally have lease terms between 12 months to 4 years. Generally, the Company is restricted from assigning or subleasing the leased assets. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.
The Company also has certain leases of offices and guest houses with lease term of 12 months or less. The Company applies the ''short-term lease'' recognition exemptions for these leases.
(e) The Company does not have any leases of low value assets.
(f) Extension and termination options are included in major leases contracts of the Company. These are used to maximise operational flexibility in terms of managing the assets used in the Company''s operations. The majority of extension and termination options held are exercisable by both the Company and lessor.
(g) There are no residual value guarantees in relation to any lease contracts.
(h) In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Most extension options in offices and guest house leases have not been included in the lease liability, because the Company could replace the assets without significant cost or business disruption. The lease term is reassessed if an option is actually exercised (or not exercised) or the Company becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.
(i) The Company had a total cash outflow of ''269.11 Lakhs for leases for the year ended March 31,2022 (Previous year : ''307.42 Lakhs).
(i) During the year an amount of ''87.97 Lakhs (Previous year: ''253.10 Lakhs) have been recognised as expense/ (income) in respect of writedown of inventory to net realisable value and provision for slow moving and obsolete items in the Statement of Profit and Loss.
(ii) The stores and spares (including packing material) inventory is stated after impairment of ''590.48 Lakhs (March 31, 2021 : ''629.55 Lakhs) in respect of provisions for slow moving and obsolete items.
(iii) The finished goods inventory above is stated after writedown of inventory to net realisable value of ''19.58 Lakhs (March 31, 2021 : ''68.48 Lakhs).
(iv) Refer Note 44 for information on inventories hypothecated as security by the company.
(i) There are no outstanding loans due from directors or other officers of the Company.
(ii) There are no loans and advances in the nature of loans granted to promoters, directors, KMPs, and the related parties (as defined under Companies Act, 2013) or other parties (including employees) either severely or jointly with any other person that are repayable on demand or without specifying any terms or period of repayment during the current or previous year. Loans granted to employees are unsecured in nature and are interest free. In respect of these loans, the schedule of repayment of principal amount has been stipulated and the employees are repaying the principal amount as stipulated in a regular manner. The terms and conditions under which these loans were granted are not prejudicial to the interest of the Company.
(viii) Rights, Preference and restrictions attached to shares 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 any, 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.
(ix) No equity shares were allotted as fully paid up by way of bonus shares or pursuant to contract(s) without payment being received in cash during the last five years. Further, none of the shares were bought back by the Company during the last five years.
(f) Equity investment through Other Comprehensive Income
The Company has elected to recognise changes in the fair value of certain investments in equity instruments in Other Comprehensive Income. These changes are accumulated within the "Equity investment through Other Comprehensive Income" reserve within equity. The Company transfers amounts from this reserve to Retained Earnings when the relevant equity shares are derecognised.
(i) There has been no delay in transferring amounts require to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2022 except for amounts aggregating to ''0.56 Lakhs (Previous year: ''0.46 Lakhs) which is held in abeyance due to dispute/ pending legal cases.
(ii) Creditors for other liabilities include liability for payment of Brand Equity and Business Promotion Royalty of ''573.30 Lakhs (March 31, 2021: ''343.00 Lakhs) payable to Tata Sons Private Limited (a related party) and Liability for Employee Family Benefit/ Support Scheme of ''423.19 Lakhs (March 31, 2021: ''300.51 Lakhs).
31. EMPLOYEE BENEFITS31.1 Post Employment Defined Contribution Plan
(i) Superannuation Fund:
The company has a superannuation plan. Employees who are members of the superannuation plan are entitled to benefits depending on the years of service and salary drawn.
Separate irrevocable trusts are maintained for employees covered and entitled to benefits. The Company contributes 15% of the eligible employees'' salary to the trust every year. Such contributions are recognized as an expense when incurred. The company has no further contractual or constructive obligation beyond this contribution as per law. Employee benefit expenses includes ''232.44 Lakhs (Previous Year: ''228.31 Lakhs) on account of contribution to the fund. The Company has reversed a provision of ''76.48 Lakhs (Previous year: ''76.20 Lakhs) which was made on account of probable deficit in the corpus of trust arising due to impairment of investments made in Infrastructure Leasing & Financial Services Limited Group (IL&FS), Dewan Housing Finance Corporation Limited (DHFL) and Reliance Capital Limited (RCL) by the trust in earlier years (included under "Contribution to Provident and Other Funds" [Refer Note 25]).
31.2 Post employment defined benefit plans/ Other long term plans:
(a) Description of Plan characteristics
Funded:
i. Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.
The scheme is funded by way of a separate irrevocable trust and the company is expected to make regular contributions to the Trust. The fund is managed by the trust and the assets are invested as per the pattern prescribed under Rule 101 of the IT Rules.
The trustees are responsible for the investment of the assets of the trust as well as the day to day administration of the scheme. The asset allocation of the trust is set by the trustees from time to time based on prescribed investment criteria and is also subject to other exposure limitations. Administrative expenses of the trust are met by the company. The trustees are required to conduct necessary business e.g. approval of Trust''s financial statements, review investment performance. The Company is exposed to actuarial risk and investment risk with respect to this plan.
ii. Provident Fund
Provident fund benefits provided under plans wherein contributions are made to an irrevocable trust set up by the Company to manage the investments and distribute the amounts entitled to employees are treated as a defined benefit plan as the Company is obligated to provide the members a rate of return which should, at the minimum, meet the interest rate declared by Government administered provident fund. The contributions made by the Company and the shortfall of interest, if any, are recognised as an expense in profit and loss under employee benefits expense.
Non-Funded:
i. Post Retirement Medical Benefit
Comprising company''s obligation to provide medical facilities at Company hospitals to retired employee and his/ her spouse, a defined benefit retirement plan. The Company accounts for the liability for post retirement medical benefits payable in the future based on an actuarial valuation.
ii. Compensated Absences
Comprising company''s obligation to provide encashment of leave at the time of exit and during the time of service or leave with pay on accumulated leave up to a prescribed limit, an other long term defined benefit plan. The Company accounts for the liability for compensated absences payable in the future based on an actuarial valuation.
iii. Long Service Award
Comprising company''s obligation to provide long service award to employees on completion of certain number of years of service, an other long term defined benefit plan. The Company accounts for the liability for long service awards payable in the future based on an actuarial valuation.
iv. Other Retirement Benefit
Comprising company''s obligation to provide monthly pension which is reviewed in every three year and medical benefits to Ex-Managing Director, a defined benefit retirement plan. The benefit is also available to the spouse of concern Managing Director. The Company accounts for the liability for such benefit payable in the future based on an actuarial valuation.
(b) Risk Analysis
The Company is exposed to a number of risks in the defined benefit plans, the most significant of which are detailed below:
(i) Investment risk
The plan liabilities are calculated using a discount rate set with references to government bond yields (discount rate); if plan assets under perform compared to the government bonds discount rate, this will create or increase a deficit.
(ii) Changes in bond yields
A decrease in the bond interest rate (discount rate) will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investment.
(iii) Life expectancy
The present value of the defined benefit plan liability is calculated by reference to best estimate of the mortality of plan participants both during and after their employment. An increase in life expectancy of plan participants will result in an increase in the plan''s liabilities.
(iv) Salary risk
The present value of the defined benefit plan''s 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.
(v) Pension Inflation Risk
Higher than expected increase in pension will increase the defined benefit obligation.
(vi) Medical Inflation Risk
Higher than expected increase in per head cost can lead to increase in defined benefit obligation.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compare to the prior period.
(viii) The Company expects to contribute ''250.52 Lakhs (Previous year: ''100.06 Lakhs) to the funded retiring gratuity plans in the next annual reporting period.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compare to the prior period.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compare to the prior period.
C. Provident Fund :
Contributions towards provident funds are recognised as an expense for the year. The Company has set up a Provident Fund Trust which is administered by Trustees. Both the employees and the Company make monthly contributions to the Fund at specified percentage of the employee''s salary and aggregate contributions along with interest thereon are paid to the employees/ nominees at retirement, death or cessation of employment.
The Trust invests funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trust should not be lower than the rate of interest declared annually by the Government under The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.
The Actuary has carried out actuarial valuation of plan''s liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, the Company has recognised an amount of '' NIL (Previous year ''546.82 Lakhs) towards interest rate guarantee shortfall.
31.3 Other Long term benefit plan:
Leave obligations
The leave obligation cover the company''s liability for privilege leave and sick leave to be availed by employees. These employees can carry forward a portion of the unutilised leave balances and utilise it in future periods or receive cash in lieu thereof (except in case of sick leave for certain category of employees) as per the Company''s policy. The Company records a provision for leave obligations in the period in which the employees render the services that increases this entitlement.
Based on past experience and in keeping with Company''s practice, the Company does not expect all employees to avail the full amount of accrued leave or require payment within the next 12 months and accordingly the total year end provision, as aforesaid is classified between current based on actuarial valuation and non current considering estimates of availment of leave, separation of employees etc.
Others consist of company and employee contribution to:
i. Employees Pension Scheme [Total amount charged to the Statement of Profit and Loss for the year ''181.94 Lakhs (Previous Year : ''188.04 Lakhs)]
32. DISCLOSURE ON FINANCIAL INSTRUMENTS 32.1 Financial Risk Management
In the course of its business, the Company is exposed primarily to market risk (risk arising out of fluctuations in foreign currency exchange rates, interest rates, security prices), liquidity and credit risk, which may adversely impact the fair value of its financial instruments.
The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the board of directors. The risk management framework aims to:
i. Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.
ii. Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.
Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the market condition. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, security price fluctuations and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
(i) Foreign Currency Exchange Rate Risk
Foreign Currency risk is the risk that fair value of the future cash flows of a financial instrument will fluctuate because of changes in the foreign exchange rates. The company undertake transactions in foreign currencies, consequently, exposures to exchange rate fluctuations arise. Any weakening of the functional currency may impact the Company''s cost of imports. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Exchange rate exposure are managed with in approved policy parameters utilizing foreign exchange forward contracts. The Company, as per its risk management policy, uses such forward contract derivative instruments primarily to hedge foreign exchange fluctuations.
(a) The movement in the profit before tax and post tax equity is a result of a change in the fair value of derivative financial instruments not designated in a hedge relationship and monetary assets and liabilities. Although the derivatives have not been designated in a hedge relationship, they act as an economic hedge and will offset the underlying transactions when they occur.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not directly exposed to the risk of changes in market interest rates because it does not have any floating rate borrowings nor does it have any variable rate financial assets/ liabilities as at the end of the reporting period.
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.
Financial instruments that are subject to concentrations of credit risk, principally consist of investments, trade receivables, loans and balances with banks. None of the financial instruments of the Company result in material concentrations of credit risks.
Other Financial Assets: Credit risk from balances with banks, term deposits, loan and investments is managed by Company''s finance department. Investment of surplus fund are made only with approved counterparties who meet the minimum threshold requirement. The Company monitors rating, credit spreads and financial strength of its counterparties.
The carrying value of financial assets represents the maximum credit risk as disclosed in 32.2.
Trade Receivables: Trade receivables are typically unsecured, considered good and are derived from revenue earned from customers. Customer credit risk is managed as per Company''s policy and procedures which involve credit approvals, establishing credit limits and continually monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and the shipments to customers are generally covered by letter of credit or other forms of credit assurance. Refer below for the credit risks arising out of outstanding trade receivables.
(ii) The Company considers its maximum exposure to credit risk with respect to customers as at March 31, 2022 to be ''2,039.37 lacs (March 31, 2021: ''5,634.06 lacs)
(iii) Information about major customer:
(a) Before creating a new customer, the Company uses a credit scoring system to assess the potential customer''s credit worthiness and defines a credit limit for the customer. The credit limit and the credit scoring attributes are reviewed twice a year.
(b) The Company''s exposure to customers is diversified and no single customer, other than one customer, contributes to more than 10% of outstanding trade receivables as at March 31, 2022 and March 31, 2021.
C. Liquidity risk
Liquidity risk refers to the risk that the Company may not meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposit and in liquid schemes of mutual funds, which carry no/low market risk.
32.2 Financial Instrument by Category
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, basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.15 to the financial statements.
The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used in the year ended March 31, 2021.
Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows below.
Quoted prices in an active market (Level 1):
This level of hierarchy includes financial instruments that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of mutual fund investments.
Valuation techniques with observable inputs (Level 2):
This level of hierarchy includes financial instruments, measured using inputs other than quoted prices included within Level 1 that are observable for the instruments, either directly (i.e., as prices) or indirectly (i.e., derived from prices) and rely as little as possible on entity specific estimates. If all significant inputs required to fair value or instrument are observable, the instrument is included in Level 2. This category consists of derivative instruments.
Valuation techniques with significant unobservable inputs (Level 3):
This level of hierarchy includes financial instruments 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. This category consists of investments in unquoted equity shares.
(a) The current financial assets and liabilities are stated at amortized cost in the financial statements which is approximately equal to their fair value mainly due to their short term in nature. Further, management assessed that the carrying amount of certain loan to employees (non current), security deposits (non current) and bank deposits (non current) approximates to their fair values as the difference between the carrying amount and fair value is not expected to be significant.
(b) Investments carried at their fair values, are generally based on market price quotations. In respect of investments in mutual funds, the fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors. Accordingly, such net asset values are analogous to fair market value with respect to these investments, as transactions of these mutual funds are carried out at such prices between investors and the issuers of these units of mutual funds.
The fair value in respect of the unquoted equity investments cannot be reliably measured.
(c) The Company does not hold or issue derivative financial instruments for trading purposes. All transactions in derivative financial instruments are undertaken to manage risks arising from underlying business activities. All derivative instruments are designated as not in hedging relationships. Derivatives are fair valued using market observable rates and published prices together with forecast cash flow information where applicable.
(d) Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of all the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of the financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.
(e) The Company''s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. There have been no transfers between Level 1, Level 2 and Level 3 from March 31,2021 to March 31,2022.
(iii) Transfer of financial assets
The Company transfers certain trade receivables under discounting arrangements with banks/financial institutions. These arrangements qualifies for de-recognition of financial assets due to these arrangements being non-recourse in nature. Consequently, the proceeds received from transfer results into derecognition of these trade receivables and hence the carrying amount of trade receivable does not include such transferred trade receivables as at the balance sheet date.
33. CAPITAL MANAGEMENT (a) Risk Management
The Company''s capital management is intended to create value for shareholders by facilitating the achievement of long-term and short-term goals of the Company, safeguard business continuity and support the growth of the Company. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debts portfolio of the Company.
The Company determines the amount of capital required on the basis of annual operating plans coupled with long-term and short-term strategic investment plans. The funding requirements are met through equity, cash generated from operation and other short-term fund based working capital borrowings. The Company is not subject to any externally imposed capital requirement.
The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company. Net debt includes interest bearing borrowings and lease liabilities less cash and cash equivalents, other bank balances (including non-current and earmarked balances) and current investments.
In respect of above, it is not practicable for the company to estimate the timings of the cash outflows if any, in respect of the above contingent liabilities pending resolution of the respective proceedings. The company does not expect any reimbursement in respect of the above contingent liabilities.
The Company has been getting exemption from operation of Employees''s State Insurance Act, 1948 from the Labour Secretary, State of Jharkhand till December 31, 2004. However, the application of the Company for similar exemption for the period from January 1, 2005 to December 31, 2010 was denied by the Labour Secretary, State of Jharkhand on alleged technical ground. Meanwhile, ESI Authorities has passed an order for recovery of ESI dues for the period from January 1, 2005 to July 31, 2005 (including interest for the period from January 1, 2005 to February 17, 2012) from the Company amounting to ?8.79 lakhs. The Company has filed a writ petition [W.P (C) 659 of 2012] before the Hon''ble Jharkhand High Court against the demand raised by the Authorities and the order of rejection passed by the Labour Secretary. Hon''ble Jharkhand High Court has granted stay on the order of not granting exemption and also directed ESI Authorities for not taking coercive steps against the Company.
The Labour Secretary, State of Jharkhand has also denied the exemption for the period from January 1, 2011 to December 31, 2014 and ESI Authorities accordingly have demanded for the contribution for the same period without specifying the demand amount. The Company has filed case [ESIC case no. 3/2016] against the demand order of ESI Authorities before the Hon''ble Labour Court in response to which the Hon''ble Court has granted stay and also directed the Authorities for not taking any coercive steps against the Company.
The Labour Secretary, State of Jharkhand has granted exemption to the Company for the period for the year 2015 and 2016 where as rejected the Company''s application for exemption for the year 2017 to 2021. Further, the ESI Authorities have raised demand of ESI contribution for the period January 1, 2017 to December 31, 2018 amounting to ''134.59 lakhs and for the period from January 1, 2019 to July 31, 2021 amounting to ''151.20 lakhs.
The Company has challenged the order of rejection for exemption for the year 2017 and 2018 and related demand vide writ petition W.P.(C) 2506/2021 and also the order of rejection for the year 2019 to 2021 and demand for the period from January 1, 2019 to July 31, 2021 vide writ petition W.P.(C) 28/2022 both before the Hon''ble Jharkhand High Court. The matter is pending for hearing as at the year-end.
Except for the demand amounts for the aforesaid periods, no further demands have been raised on the Company by the ESI Authorities for the various ongoing litigation and accordingly, no further amounts have been considered for disclosure as contingent liability as they are not ascertainable.
36. The Hon''ble Supreme Court of India in its judgment in the matter of Vivekananda Vidyamandir & Others Vs The Regional Provident Fund Commissioner (II) West Bengal laid principles in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. Based on assessment performed by the management of the impact of aforesaid judgement and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees'' Provident Fund Organisation, the order did not result in any material impact on these financial statements. The management will continue to assess the impact of further developments relating to retrospective application of the Hon''ble Supreme Court''s judgement together with the legal advisors taking into account the additional guidance as and when issued by the statutory authorities and deal with it accordingly.
37. The Company had claimed a refund amounting to ''823.89 Lakhs pertaining to sales tax on purchase of raw materials based on Bihar Industrial Policy, 1995. This claim was up-held during 2002-03 by the Hon''ble Ranchi High Court and was passed on to the Joint Commissioner of Commercial Taxes (JCCT) for implementation. Despite admittance of the refund claim in its entirety by JCCT, the Commissioner of Commercial Taxes (CCT) reduced the claim to ''519.26 Lakhs and refunded the same over 2002-03 and 2003-04. The Company''s Review petition before the Hon''ble High Court of Jharkhand against the order of CCT was rejected. Later on, the Company filed a Special Leave Petition (SLP) before the Hon''ble Supreme Court. This SLP was disposed off with the direction to file an application before the High Court and directing the High Court to decide the case on merit. On filing a writ petition before the Hon''ble High Court of Jharkhand, the matter was decided in favour of the Company on February 22, 2017. By this order, the court gave direction to the department to refund the Principal amount of ''304.63 Lakhs along with statutory interest within 16 weeks from the date of receipt of copy of the order. The Commercial Tax Department had filed a petition before the Hon''ble Supreme Court against the order of the Hon''ble High Court and obtained a stay until further order of the Hon''ble Supreme Court. The Company has filed a reply to the petition before the Hon''ble Supreme Court on May 23, 2018. The matter is currently pending before the Hon''ble Supreme Court.
Mar 31, 2018
1. GENERAL CORPORATE INFORMATION
The Tinplate Company of India Ltd.(TCIL) is the largest producer of tin coated and tin free steel sheets in India having its headquarter in Kolkata, and works located at Jamshedpur, Jharkhand. The strategic goal of the company is to create and enhance value for the stakeholders through growth and competitiveness and also to reach status of supplier of choice for tin mill products in Asia.
The financial statements were approved vide resolution of the Board of Directors in their meeting held on April 24, 2018.
(i) Information about major customer
Before creating a new customer, the Company uses a credit scoring system to assess the potential customerâs credit worthiness and defines a credit limit for the customer. The credit limt and the credit scoring attributes are reviewed twice a year. There are no customers who represent more than 10% of the total balance of trade receivable as at March 31, 2018.
Details of Reserves & Surplus are as follows:
(i) General Reserve
Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act 2013, the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn though the company may transfer such percentage of its profit for the financial year as it may consider appropriate.
(ii) Security Premium Reserve
Securities premium reserve is used to record the premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
(iv) Capital Redemption Reserve
The Companies Act requires that the Company while redeeming its preference shares out of the free reserves or securities premium reserve of the Company, shall transfer out of such profits a sum equal to nominal value of the shares redeemed to Capital Redemption Reserve Account. The capital redemption reserve account may be applied by the Company in paying up unissued shares of the Company to be issued to shareholders of the Company as fully paid bonus shares. The Company established this reserve pursuant to the redemption of preference shares issued in earlier years.
2. EMPLOYEE BENEFITS
2.01 Superannuation fund:
The company has a superannuation plan. Employees who are members of the superannuation plan are entitled to benefits depending on the years of service and salary drawn.
Separate irrevocable trusts are maintained for employees covered and entitled to benefits. The company contribute up to 15% or ^150000, whichever is lower, of the eligible employees salary to the trust every year. Such contributions are recognized as an expense when incurred. The company has no further contractual or constructive obligation beyond this contribution. Total amount charged to the Statement of Profit & Loss for the year Rs. 331.31 Lacs (Previous year : Rs. 323.88 Lacs).
2.02 The Company operates following post employment / other long term plans:
Funded
i. Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contribution to gratuity fund established as trust. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.
The scheme is funded by way of a separate irrevocable trust and the company is expected to make regular contributions to the Trust. The fund is managed internally by the company and the assets are invested as per the pattern prescribed under Rule 101 of the IT Rules.
The trustees are responsible for the investment of the assets of the trust as well as the day to day administration of the scheme. The asset allocation of the trust is set by the trustees from time to time, taking into account the membership profile, the liquidity requirements of the plan and risk appetite of the plan sponsor as per the investment norms. Administrative expenses of the trust are met by the company. The trustees are required to conduct necessary business e.g. approval of Trustâs Financial Statements, review invetsment performance.
Nonfunded
i. Post Retirement Medical Benefit (PRMB)
Comprising companyâs obligation to provide medical facilities at Company hospitals to retired employee and his/ her spouse, a defined benefit retirement plan. The Company accounts for the liability for post retirement medical benefits payable in the future based on an actuarial valuation.
ii. Compensated Absences (CA)
Comprising companyâs obligation to provide encashment of leave at the time of exit and during the time of service or leave with pay on accumulated leave up to a prescribed limit, an other long term defined benefit plan. The Company accounts for the liability for compensated absences payable in the future based on an actuarial valuation.
iii. Long Service Award (LSA)
Comprising companyâs obligation to provide long service award to employees on completion of certain number of years of service, an other long term defined benefit plan. The Company accounts for the liability for long service awards payable in the future based on an actuarial valuation.
iv. Other Retirement Benefit (ORB)
Comprising companyâs obligation to provide pension and medical benefits to Ex-Managing Director, a defined benefit retirement plan. The Company accounts for the liability for such benefit payable in the future based on an actuarial valuation.
The Company is expose to number of risk the most significant of which are detailed below:
Investment risk
The plan liabilities are calculated using a discount rate set with references to corporate bond yields; if plan assets under perform compared to the corporate bonds discount rate, this will create or increase a deficit. The defined benefit plans hold a significant proportion of equity type assets, which are expected to outperform corporate bonds in the long-term while providing volatility and risk in the short-term.
As the plans mature, the Company intends to reduce the level of investment risk by investing more in assets that better match the liabilities.
Changes in bond yields
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 planâs debt investment.
Life expectancy
The majority of the plans obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plans liabilities. This is particularly significant in the post- retirement medical benefit defined benefit plans, where inflationary will result in higher sensitivity to changes in life expectancy.
Salary risk
The present value of the defined benefit pan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
(ix) The Company expects to contribute Rs. Nil to the funded retiring gratuity plans in Financial Year 2018-2019.
(x) The expenses for the above mentioned benefits have been disclosed under the following line items:
i) Compensated Absence, Other Retirement Benefits and Long Service Award - under Salaries and wages, including bonus.
ii) Gratuity - under Contribution to provident and other funds.
iii) Post Retirement Medical Benefits - under Staff Welfare Expense.
(xi) Provident Fund :
Contributions towards provident funds are recognised as an expense for the year. The Company has set up a Provident Fund Trust which is administered by Trustees. Both the employees and the Company make monthly contributions to the Fund at specified percentage of the employeeâs salary and aggregate contributions along with interest thereon are paid to the employees/ nominees at retirement, death or cessation of employment.
The Trust invests funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Government under The Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.
The Actuary has carried out actuarial valuation of planâs liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, no amount is required to be provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Disclosures given hereunder are restricted to the information available as per the Actuaryâs Report.
(xii) Leave obligations :
Based on past experience and in keeping with Companyâs practice, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months and accordingly the total year end provision determined on actuarial valuation, as aforesaid is classified between current and non current.
(xiii) Others:
Others consist of Company and employee contribution to :
i. Employee Pension Scheme [Total amount charged to the Statement of Profit and Loss for the year Rs. 345.82 Lacs (Previous year Rs. 338.80 Lacs)].
3. CORPORATE SOCIAL RESPONSIBILITY EXPENDITURE
Other General expenses include amount incurred for Corporate Social Responsibilty Expenditure as required under section 135 of the Companies Act 2013.
4. PROPOSED DIVIDEND
In respect of the year ended March 31, 2018, the Board of Directors proposed that a dividend of Rs. 2 per share be paid on fully paid equity share. This equity dividend is subject to approval by shareholders in the ensuing Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. If approved, the dividend would result in a cash outflow of Rs. 2,519.51 Lacs (inclusive of a Dividend Distribution Tax of Rs. 426.16 Lacs).
On July 25, 2017, a dividend of Rs. 1.60 per share (Total dividend Rs. 2,015.61 Lacs inclusive of a Dividend Distribution Tax of Rs. 340.93 Lacs) was paid to the holders of fully paid equity shares.
5. FINANCIAL RISK MANAGEMENT, CAPITAL MANAGEMENT AND FAIR VALUE MEASUREMENT
5.01 Financial risk management
In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, security prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the board of directors. The risk management framework aims to:
i. Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Companyâs business plan.
ii. Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.
A. Market Risk
Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the market condition. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, security price fluctuations and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
(i) Foreign currency Exchange Rate risk
The company undertake transactions in foreign currencies, consequently, exposures to exchange rate fluctuations arise. Exchange rate exposure are managed with in approved policy parameters utilizing forward foreign exchange contracts.
The carrying amount of the companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
(a) Foreign currency risk exposure
The companyâs exposure to foreign currency risk at the end of the reporting period expressed in INR, are as follows:
(b) Sensitivity
The following table details companyâs sensitivity to 10% increase or decrease in the INR against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents managements assessment of the reasonably possible change in the foreign exchange rate. The sensitivity analysis include only outstanding foreign currency denominated monetary items and adjust these transaction at the year end for a 10% change in foreign currency rate.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to the risk of changes in market interest rates because it does not have any floating rate borrowings nor does it have any variable rate financial assets.
(iii) Security price risk
Security price risk is the risk that the fair value of a financial instrument will fluctuate due to change in market traded prices. The company invests its surplus funds in mainly liquid schemes of mutual funds (debt instruments) which are categorised as low risk products from liquidity and interest rate perspectives. Also the option exercised by the Company is Daily Dividend against these securities where the Security/Unit price remains constant which mitigates the security price risk.
B. Credit risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.
Financial instruments that are subject to concentrations of credit risk, principally consist of investments, trade receivables, loans and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.
The risk relating to Trade Receivables is shown under Note 7.
C. Liquidity risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds, which carry no/low mark to market risk.
The table below provides details regarding the contractual maturities of financial liabilities including estimated interest payments as at March 31, 2018 and March 31, 2017.
5.02 Capital management
The Companyâs capital management is intended to create value for shareholders by facilitating the meeting of long-term and shortterm goals of the Company.
The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity and other long-term/short-term borrowings. The Companyâs policy is aimed at combination of short-term and long-term borrowings. The company is not subject to any externally imposed capital requirement.
The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
No changes were made to the objectives, policies or processes for managing capital during the year ended March 31, 2018 and March 31, 2017.
5.03 Fair Value Measurement
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 2.17 & 2.18 to the financial statements.
Financial Assets and Liabilities
The following table presents carrying amount and fair value of each category of financial assets and liabilities
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 instruments that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of mutual fund investments.
Valuation techniques with observable inputs (Level 2):
This level of hierarchy includes financial instruments, measured using inputs other than quoted prices included within Level 1 that are observable for the instruments, either directly (i.e., as prices) or indirectly (i.e., derived from prices) and rely as little as possible on entity specific estimates. If all significant inputs required to fair value or instrument are observable, the instrument is included in Level 2.
Valuation techniques with significant unobservable inputs (Level 3):
This level of hierarchy includes financial instruments 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.
6. The Company had claimed a refund amounting to Rs. 823.89 Lacs pertaining to Sales Tax on purchase of Raw Materials based on Bihar Industrial Policy, 1995. This claim was up-held during 2002-03 by the Ranchi High Court and was passed on to the Joint Commissioner of Commercial Taxes (JCCT) for implementation. Despite admittance of the refund claim in its entirety by JCCT, the Commissioner of Commercial Taxes (CCT) reduced the claim to Rs 519.26 lacs and refunded the same over 2002-03 and 2003-04. The Companyâs Review petition before the Honâble High Court of Jharkhand against the order of CCT had been rejected. Later on, the Company had filed a Special Leave Petition (SLP) before Honâble Supreme Court. This SLP has been disposed off with the direction to file an application before the High Court and directed the High Court to decide the case on merit. On filing a writ before Honâble High Court, Jharkhand, the matter decided in favour of M/s The Tinplate Company of India Ltd on 22.02.2017. By this order, the court has given direction to the department to refund the Principal amount of Rs. 304.63 Lacs along with statutory interest within 16 weeks from the date of receipt of copy of this order. However, to protect the interest of company, caveat has been filed before the Honâble Supreme Court . Within the stipulated period, the Commercial Tax Department had filed a petition before Honâble Supreme Court against the order of the Honâble High Court and obtained a stay until further order of the Honâble Supreme Court. The Company is in process of filing a reply to the petition before the Honâble Supreme Court.
7. SEGMENT REPORTING
The Companyâs operations are predominantly manufacture of Electrolytic Tin Mill Product. The Company is managed organisationally as a unified entity and according to the management this is a single segment Company as envisaged in âInd AS 108 - Operating Segmentsâ
Entity Wide Disclosures:
(a) Information about products and services
(b) Information about geographical areas
The Company is domiciled in India. The amount of its revenue from external customers broken down by the location of the customers is shown as below:
None of the non-current assets held by the Company are located in Countries other than India.
(c) Information about major customers
Revenue of Rs. 18,596.16 Lacs (Previous Year: Rs. 51,964.30 Lacs) is derived from one external customer who contributes to more than 10% of the total revenue.
8. Commencing quarter ended September 30, 2017, the Company had transitioned from the arrangement of converting Hot Rolled Coils (HRC) supplied by Tata Steel Limited (TSL) into Electrolytic Tinplate (ETP) and assisting TSL in selling the same to the end consumers, to purchasing HRC from TSL and / or other suppliers and manufacturing and selling ETP and other products on its own account; accordingly some of the line items in these financial statements for the current year are not comparable with the corresponding previous year.
9. The Company had conversion agreement with Tata Steel Limited which included consignment agency and marketing arrangements, and the Company was responsible for collection of debts on behalf of Tata Steel Limited. Such debts (considered good) outstanding as at March 31, 2018 amounts to Rs. 42.14 Lacs (Bills discounted - Rs. Nil) [March 31, 2017: Rs. 8,180.48 Lacs (Bills discounted -Rs. 2,314.14 Lacs)] of which Rs. 28.35 Lacs (March 31, 2017 - Rs. 46.06 Lacs) were overdue for more than six months.
10. Fund based and non fund based credit facilities (working capital purposes) extended to the Company are secured by hypothecation of the Companyâs entire current assets, including Raw Materials, Work-in-Progress, Finished Goods, Stock-in-trade, Stores & spares, Scraps, book debts, outstanding monies receivable, claims and bills, both present and future, by way of first charge in favour of State Bank of India, Union Bank of India, HDFC Bank Limited and The Hongkong and Sanghai Banking Corporation Limited ranking pari passu. The above facilities are also secured by way of second charge by hypothecation of the whole of the moveable properties including moveable plant & machinery, machinery spares, tools & other moveables, both present and future in favour of State Bank of India, HDFC Bank Limited and The Hongkong and Sanghai Banking Corporation Limited ranking pari passu. Moveable plant and machineries are secured by way of first charge in favour of Union Bank of India.
Mar 31, 2017
Note:
a. Site, Water and Drainage System and Building (Except at kolkata) are on leasehold land.
b. Amount Adjusted on account of Lease assets transfer on completion of lease term.
c. Obligations under Finance Lease:
The Company has acquired Plant and Machinery under financial lease arrangements. Minimum Lease Payments outstanding and other particulars in respect of leased assets are as under:
Information about major customer
Before accepting any new customer, the Company uses their own credit scoring system to access the potential customers credit quality and define credit limit by customer. Limits and scoring attributes to customer are reviewed twice a year. Trade receivable balance as at March 31, 2017 of Rs. 4,554.48 lacs (as at March 31,2016 of Rs. 3,842.86 lacs and as at April 1,2015of? 2,806.05 Lacs) is due from Tata Steel, the company''s largest customer. There are no customers who represents more than 10%ofthe total balance of trade receivable.
Rights and restrictions attached to shares Equity shares:
The company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend, if any, 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, in proportion to their shareholding.
Grants relating to property, plant and equipment primarily relate to duty saved on imports of capital goods under the EPCG scheme. Under such scheme the group is committed to export certain items of the duty saved on import of capital goods over the specified period. Such grants recognized are released to the statement of profit and loss on the basis of the fulfillment of the export obligation.
Note:
i) Salaries and wages including bonus include amount of Rs. 994.37 Lacs (2015-16 Rs.488.96 Lacs) incurred towards early retirement opportunity scheme.
ii) The company has recognized, in the statement of profit and loss for the current period, an amount of Rs.219.76 Lacs (2015-16: Rs.203.08 Lacs) as expenses under the following kinds of employee benefits with respect to Key managerial personnel:
1 Employee Benefits
2. Defined contribution plans:
The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognized in relation to these schemes represents the value of contributions payable during the period by them at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior month''s contributions that were not due to be paid until after the end of the reporting period.
The Company has recognized, in the Statement of Profit and Loss for the year ended 31.03.2017,an amount of Rs.872.72 Lacs (2015-16 Rs.888.20 lacs) as expenses under the following defined contribution plan
Provident fund:
In accordance with Indian law, eligible employees of Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees salary (currently 12% of employees salary). The contributions, as specified under the law, are made to the provident fund and pension fund set up as an irrevocable trust by the company.
Superannuation fund
The company have a superannuation plan. Employees who are members of the defined benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn. Separate irrevocable trusts are maintained for employees covered and entitled to benefits. The company contribute up to 15%or Rs.1,00,000,whichever is lower, of the eligible employees salary to the trust every year. Such contributions are recognized as an expense when incurred. The company has no further obligation beyond this contribution.
Other:
Other consist of Company and employees contribution to Employees Pension Scheme
31.02 Defined benefit plan:
The company sponsors funded defined benefit plans for qualify employees. The defined benefit plan are adminisable by a separate fund that is legally separate from the entity. The board of the fund is required by law and by the articles of association to act in the interest of the fund and relevant state holder in the scheme. The board of the fund is responsible for the investment policy with regard to the assets of the fund.
The Company operates following post employment / other long term defined benefits plans:
Funded
i. Gratuity Non funded
i. Post Retirement Medical Benefit (PRMB)
ii. Compensated absence
iii. Long Service Award (LSA)
iv. Other Retirement Benefit (ORB)
The Company is expose to number of risk the most significant of which are detailed below:
Investment risk
The plan liabilities are calculated using a discount rate set with references to corporate bond yields; if plan assets under perform compared to the corporate bonds discount rate, this will create or increase a deficit. The defined benefit plans hold a significant proportion of equity type assets, which are expected to outperform corporate bonds in the long-term while providing volatility and risk in the short-term.
As the plans mature, the Company intends to reduce the level of investment risk by investing more in assets that better match the liabilities.
Changes in bond yields
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 investment.
Life expectancy
The majority of the plan s obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan s liabilities. This is particularly significant in the post- retirement medical benefit defined benefit plans, where inflationary increases result in higher sensitivity to changes in life expectancy.
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.
31.05 The expenses for the above mentioned benefits have been disclosed under the following line items:
i) Compensated Absence and ORB - under Salaries and wages, including bonus.
ii) Gratuity - under Contribution to providend and other funds.
iii) Long Service Award and PRMB - under Staff Welfare Expense.
3. Significant actuarial assumption for the determination of the defined obligations are discount rate, expected salary income and mortality. The sensitivity analysis below have been determined based on reasonably possible change of the respective assumption occurring at the end of the reporting period, while holding all other assumption constant.
4. Corporate Social Responsibility Expenditure
Other General expenses and Employees Benefit Expenses include amount incurred for Corporate Social Responsibility Expenditure as required under section 135 of the Companies Act, 2013.
5. Proposed Dividend
In respect of the year ended March 31,2017,the directors propose that a dividend of Rs. 1.60 per share be paid on fully equity share. This equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is Rs.1,674.68 Lacs.
On July 05, 2016, a dividend of Rs.2 per share (Total dividend Rs.2,093.35 Lacs) was paid to the holders of Fully paid Equity shares. In September 28 2015, the dividend was paid Rs.1.60 per share (Total dividend Rs.1,674.68 Lacs).
6 Financial instruments 38.01 Capital management
The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company.
The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity and other long-term/short-term borrowings.
The Company''s policy is aimed at combination of short-term and long-term borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
7 Disclosures on financial instruments
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 2.15to the financial statements.
Financial Assets and Liabilities
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 quoted equity shares, quoted corporate debt instruments and mutual fund investments.
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 no rare they based on available market data. The main items in this category are unquoted available-for-sale financial assets, measured at fair value.
Some of the Company''s Financial assets and liabilities are measured at fair value at the end of each reporting period.
Notes:
i) The short-term financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.
ii) Investments carried at their fair values, are generally based on market price quotations. The fair value in respect of the unquoted equity investments cannot be reliably measured.
iii) Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of all the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of the financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.
iv) There have been no transfers between level 1 and level 2 for the years ended March 31,2016and 2015.
8. Financial risk management objective
In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the board of directors. The risk management frame work aims to:
i. Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.
ii. Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.
9. Market Risk
Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
10. Foreign currency Exchange Rate risk
The company undertake transactions in foreign currencies, consequently, exposures to exchange rate fluctuations arise. Exchange rate exposure are managed with in approved policy parameters utilizing forward foreign exchange contracts.
The Carrying amount of the companies foreign currency determinated monetary assets and monetary liabilities at the end of the reporting period are as follows :
The following table details company''s sensitivity to 10% increase or decrease in the INR against the relevant to foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personal and represents managements assessment of the reasonably possible change in the foreign exchange rate. The sensitivity analysis include only outstanding foreign currency denominates monetary items and adjust these transaction at the period end for a 10%change in foreign currency rate.
11. Interestrate risk management
The company is exposes to interest rate risk because company borrow fund at both fixed and floating interest rate. If interest rate had been 50 basis points higher/lower and all other variables were held constant, the Company''s Profit for the year ended March 31,2017 would decrease/increase by Rs. 0.51 Lacs For the year ended March 31 2016 Rs. 10.98 Lacs).
12. Credit risk management
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Financial instruments that are subject to concentrations of credit risk, principally consist of investments trade receivables, loans and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks. The risk relating to trade receivables is shown under note no. 7.
13. Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds, which carry no/low mark to market risk. The table below provides details regarding the contractual maturities of financial liabilities including estimated interest payments as at March 31,2017,2016and April 1,2015.
* Other than demands amounting to Rs. 9.75 Lakhs (31.03.2016: Rs. 9.75 Lacs, 01.04.2015 Rs.9.75 Lacs).
$ Other than items remanded back for fresh assessment.
# Company has been getting exemption till 31.12.2004. Our application for exemption was pending for the period 01.01.2005 to 31.12.2010 before the ESI authorities, which was denied on alleged technical ground. Company has filed an appeal before The Hon''ble Jharkhand High Court, on which a stay has been granted. In the mean time company received recovery notice for Rs. 8.78 lakhs for the period 01.01.2005 to 31.07.2005. No other demand has been raised by The ESI Corporation in absence of which contingent liability for the period in which exemption was denied is not ascertainable.
14. The Company had claimed a refund amounting to Rs.823.89 lacs pertaining to sales tax on purchase of raw materials based on Bihar Industrial Policy, 1995. This claim was up-held during 2002-03 by the erstwhile Ranchi Bench of Patna High Court and was passed on to the Joint Commissioner of Commercial Taxes (JCCT) for implementation. Despite admittance of the refund claim in its entirety by JCCT, the Commissioner of Commercial Taxes (CCT) reduced the claim to Rs 519.26 lacs and refunded the same over 2002-03 and 2003-04. The Company''s Review petition before the Hon''ble High Court of Jharkhand against the order of CCT had been rejected. Later on, the Company had filed a Special Leave Petition (SLP) before Hon''ble Supreme Court. This SLP has been disposed off with the direction to file an application before the High Court and directed the High Court to decide the case on merit. The application has already been filed before High Court Ranchi. The balance claim amount outstanding at the yearend is Rs.304.63 lacs. (31st March, 2016: Rs.304 .63 lacs, 1st April, 2015 :Rs.304.63 lacs).
15. Segment Reporting
The Company''s operations are predominantly manufacture of Electrolytic Tin Mill Product. The Company is managed organizationally as a unified entity and according to the management this is a single segment Company as envisaged in"IndAS 108".
16.. The Company has an on-going conversion arrangement with Tata Steel Limited which includes consignment agency and marketing arrangements, and the Company is responsible for collection of debts on behalf of Tata Steel Limited. Such debts (considered good) outstanding at March 31st 2017 amounts to Rs.8180.48 Lacs (Bills discounted of Rs.2,314.14 lacs) [31.03.2016 : Rs.6,054.27 lacs 01.04.2015 Rs.7,223.57 Lacs (Bills discounted 31.03.16 of Rs.1,494.82 lacs, 01.04.2015 Rs.1,386.99 lacs)], of which Rs.46.06 lacs (31.03.2016- Rs.62.23 lacs, 01.04.2015 Rs.13.80 Lacs) are overdue for more than six months.
17.. Previous year figures have been regrouped where necessary to conform with figures for the current period.
Notes:
18. The Company recognizes costs relating to its post employment defined benefit plan on actuarial basis both under IGAAP and Ind AS. Under IGAAP, the entire cost, including actuarial gains and losses, are recognized to profit and loss. Under Ind AS remeasurement gains and losses are recognized in retained earnings through other comprehensive income.
19. Under IGAAP, insurance spares were recognized as part of Inventory and charged to Profit & loss as and when consumed. Under Ind AS, spares items which meet the definition of Property Plant and Equipments (PPE), are classified under CWIP and capitalized when put to use.
20. Under IGAAP, Long-term investments are usually carried at cost. However, when there is a decline, other than temporary, in the value of a long term investment, the carrying amount is reduced to recognize the decline. Under Ind AS, long term equity investment are remeasured at fair value through Other Comprehensive Income. As on 1st April, 2015 (i,e,on the date of transition to Ind AS),
21. Notes to the Reconciliation
a. Under I GAAP, dividends on equity shares recommended by the Board of Directors after the end of the reporting period but before the financial statements were approved for issue were recognized in the financial statements as a liability. Under Ind AS, such dividends are recognized when declared by the members in a general meeting. The affect of this change is an increase in total equity of Rs.2,519.51 lacs as at March 31,2016. (Rs. 2,015.62 as at April 1,2015), but does not affect profit before tax and total profit for the year ended March 31,2016.
b. Under IGAAP, redeemable preference shares were classified as part of total equity. Dividend paid on these preference shares were adjusted against retained earnings and not recognized as finance costs in profit & loss. However, under Ind AS, financial instruments are classified as a liability or equity according to the substance of the contractual arrangement and not in legal form. These preference shares do not contain any equity component and hence, have been classified in their entirety as a financial liability under Ind AS. The resultant dividends have been recognized as finance cost in profit & loss. The net affect of this change is a decrease in total equity NIL as at March 31,2016 (Rs. 473.72 lacs as at April 1,2015).
c. Under Ind AS, bank overdrafts which are repayable on demand and form an integral part of entity''s cash management system are included in cash &cash equivalent for the purpose of presentation of statement of cash flows. Whereas under I GAAP, there was no similar guidance and hence bank overdrafts were considered similar to other borrowings and the movements therein were reflected in cash flows from financing activities. The affect of this is that bank overdrafts of Rs.NIL as at March 31,2016and Rs. Nil lacs as at April 1,2015 have been considered as part of cash and cash equivalents under Ind AS for the purpose of presentation of cash flows.
d. Under IGAAP, actuarial gains and losses were recognized in profit or loss. Under Ind AS, the actuarial gain and losses form part of remeasurment of the net defined liability/asset which is recognized in other comprehensive income. Consequently, the tax affect of the same has also been recognized in other comprehensive income under Ind AS, instead of profit or loss. The total actuarial losses for the period ended March 31, 2016 amounted to Rs.31.13 lacs and the tax affect thereon Rs.10.77 lacs. The change does not affect total equity, but there is an decrease of Rs.20.36 lacs in profit before tax and Rs.20.36 lacs in total profit for the period ended March 31,2016.
e. Under IGAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, these financial assets have been classified as FVTOCI. On the date of transition to Ind AS, these financial assets have been measured at fair value which is higher than the cost as per IGAAP, resulting in an increase in the carrying amount by Rs.792.88 lacs as at April 1, 2015. The corresponding deferred taxes have also been recognized at April1, 2015 for Rs.162.41 lacs. The net affect of these changes is an increase in total equity of Rs. 630.47 lacs. as at April1, 2015.
f. Under IGAAP, there was no concept of other comprehensive Income. Under Ind AS, specified items of income , expenses, gains or losses are required to be presented in other comprehensive income.
g. Under IGAAP, insurance spares were recognized as part of Inventory and charged to Profit & Loss as and when consumed. Under Ind AS, items of spares which meet the definition of Property, Plant and Equipments (PPE) are classified under CWIP and capitalized as and when put to use. On the date of transition April1, 2015, Insurance spares of Rs. 216.76 lacs have been transferred to CWIP. As on March 31,2016 Insurance Spares of Rs. 222.25 has been transferred to CWIP. These changes do not affect total equity, as on the date of transition.
h. Under previous GAAP, revenue from sale of products was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of products includes excise duty. The corresponding excise duty expenses is presented separately on the face of statement of profit and loss. The change does not affect total equity as at April 1,2015 and March 31,2016, profit before tax or total profit for the year ended March 31,2016.
Approval of financial statement
The financial statement were approve for issue by the Board of Directors on April 21st, 2017.
Mar 31, 2016
1. The Company had claimed a refund amounting to Rs 823.89 lacs pertaining to sales tax on purchase of raw materials based on Bihar Industrial Policy, 1995. This claim was up-held during 2002-03 by the erstwhile Ranchi Bench of Patna High Court and was passed on to the Joint Commissioner of Commercial Taxes (JCCT) for implementation. Despite admittance of the refund claim in its entirety by JCCT, the Commissioner of Commercial Taxes (CCT) reduced the claim to Rs 519.26 lacs and refunded the same over 2002-03 and 2003-04. The Company''s Review petition before the Hon''ble High Court of Jharkhand against the order of CCT had been rejected. Later on, the Company had filed a Special Leave Petition (SLP) before Hon''ble Supreme Court. This SLP has been disposed off with the direction to file an application before the High Court and directed the High Court to decide the case on merit. The application has already been filed before High Court Ranchi. The balance claim amount outstanding at the year end isRs.304.63 lacs. (31st March, 2015: Rs. 304 .63 lacs) 7 in I arc
2. The Company has an on-going conversion arrangement with Tata Steel Limited which includes consignment agency and marketing arrangements, and the Company is responsible for collection of debts on behalf of Tata Steel Limited. Such debts (considered good) outstanding at 31.03.2016 amounts to Rs. 6,054.27 Lacs (Bills discounted of Rs. 1,494.82 lacs) [ 31.03.2015 : Rs. 7,223.57 lacs (Bills discounted of Rs. 1,386.99 lacs)], of which Rs. 62.23 lacs (31.03.2015-^13.80 lacs) are overdue for more than six months.
3. Previous year figures have been regrouped where necessary to conform with figures for the current period.
Mar 31, 2015
1. General Corporate Information
The Tinplate Company of India Ltd.(TCIL) is the largest producer of tin
coated and tin free steel sheets in India. Having its headquarter in
Kolkata, the company's works is located at Jamshedpur, Jharkhand. The
strategic goal of the company is to create and enhance value for the
stakeholders through growth and competitiveness and also to reach
status of supplier of choice for tin mill products in Asia.
2 Rights, preferences and restrictions attached to shares Equity shares
The company has one class of equity shares having a par value of Rs.10
per share. Each shareholder is eligible for one vote per share held.
The dividend,if any, 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 Preference shares
8.5% Non Cumulative Optionally Convertible Preference Shares (OCPS):
The OCPS holder whose shares have been redeemed on 31.03.2015, as per
the terms of the subscription agreement, is entitled to dividend @ Rs.
8.50 per OCPS.
4. Contingent Liabilities and commitments
(a) Contingent Liabilities
Rs.in lacs
As at As at
31.03.2015 31.03.2014
A. Claims not acknowledged by
the Company
Excise $ 338.21 341.64
Customs 265.92 265.92
Sales Tax/CST*$ 1,321.67 2,104.64
Service Tax 3,830.55 2,805.49
Income Tax 317.14 2,045.36
ESI(Labourrelated)# 8.78 8.78
Others 149.00 149.00
B. Bills Discounted 9,413.08 8,410.18
*Other than demands amounting to Rs. 9.75 Lacs (31st March 2014: Rs.
9.75 Lacs)
* Other than items remanded back for fresh assessment.
* Company has been getting exemption till 31.12.2004. Our application
for exemption was pending for the period 01.01.2005 to 31.12.2010
before the ESI authorities, which was denied on alleged technical
ground. Company has filed an appeal before The Hon'ble Jharkhand High
Court, on which a stay has been granted. In the mean time company
received recovery notice for Rs. 8.78 lakhs for the period 01.01.2005
to 31.07.2005. No other demand has been raised by The ESI Corporation
in absence of which contingent liability for the period in which
exemption was denied is not ascertainable.
(b) Capital Commitments
Estimated value of contracts in capital account remaining to be executed
[net of advances Rs. 518.90 lacs (31.03.2014: Rs.
116.47lacs)refernoteno.13] 3,197.00 1,868.44
5. The Company had claimed a refund amounting to Rs 823.89 lacs
pertaining to sales tax on purchase of raw materials based on Bihar
Industrial Policy, 1995. This claim was up-held during 2002-03 by the
erstwhile Ranchi Bench of Patna High Court and was passsed on to the
Joint Commissioner of Commercial Taxes (JCCT) for implementation.
Despite admittance of the refund claim in its entirety by JCCT, the
Commissioner of Commercial Taxes (CCT) reduced the claim to Rs. 519.26
lacs and refunded the same over 2002-03 and 2003-04. The Company's
Review petition before the Hon'ble High Court of Jharkhand against the
order of CCT had been rejected. Later on,the Company had filed a
Special Leave Petition (SLP) before Hon'ble Supreme Court. This SLP has
been disposed off with the direction to file an application before the
High Court and directed the High Court to decide the case on merit. The
application has already been filed before High Court Ranchi. The
balance claim amount outstanding at the year end is Rs. 304.63 lacs
(31st March, 2014:
6. Segment Reporting
The Company's operations are predominantly manufacture of Electrolytic
Tin Mill Product. The Company is managed organisationally as a unified
entity and according to the management this is a single segment Company
as envisaged in "Accounting Standard (AS 17)".
7. Related Party Transactions Related party relationship:
Name of the related party Nature of Relationship
Tata Steel Limited : PromoterCompany/Parent
Tayo Rolls Limited
The Tata Pigments Limited
The Indian Steel and Wire
Products Limited
TKM Global Logistics Limited
Tata Steel Processing and
Distribution Limited : Fellow Subsidiary
Kalimati Investment Company Limited Tata Steel UK Limited
Tata Steel International (Singapore) Pte. Limited Jamshedpur Utility
and Services Company Limited Tata Sponge Iron Limited
Key Management Personnel
Mr. Tarun Kumar Daga Managing Director
Mr Chacko Joseph Chief Financial Officer
Mr Suddhabrata Kar Company Secretary
Mrs. Anita Kar Relative of Company Secretary
8. The Company has an on-going conversion arrangement with Tata Steel
Limited which includes consignment agency and marketing arrangements,
and the Company is responsible for collection of debts on behalf of
Tata Steel Limited. Such debts (considered good) outstanding at
31.03.2015 amounts to Rs. 7,223.57 Lacs (net of bills discounted of Rs.
1,386.99 lacs) [31.03.2014: Rs. 8,265.87 lacs (net of bills discounted
of Rs. 2,602.48 lacs)], of which Rs. 13.80 lacs (31.03.2014: Rs. 9.57
lacs) are overdue for more than six months.
9. Previous year's figures have been regrouped where necessary to
confirm with figures for the current year.
Mar 31, 2014
1. General Corporate Information
The Tinplate Company of India Ltd. (TCIL) is the largest producer of
tin coated and tin free steel sheets in India. Having its headquarter
in Kolkata, the company''s works is located at Jamshedpur, Jharkhand.
The strategic goal of the company is to create and enhance value for
the stakeholders through growth and competitiveness and also to reach
status of supplier of choice for tin mill products in Asia.
2. Share Capital
Notes :
As per the terms of the Subscription Agreement 13,10,000 8.5% Non
Cumulative Optionally Convertible Preference Shares (OCPS) and 6,62,000
OCPS were partly redeemed on 1st April, 2013 and 31st March, 2014
respectively. With the said part redemptions made on 1st April, 2013
and 31st March, 2014 13,10,000 OCPS and 6,62,000 OCPS aggregating to
19,72,000 OCPS stands fully redeemed. In adherence to the Subscription
Agreement the balance 92,61,000 were also partly redeemed on 31st
March, 2014.
Rights, preferences and restrictions attached to shares Equity shares
The company has one class of equity shares having a par value of Rs.10
per share. Each shareholder is eligible for one vote per share held.
The dividend, if any, 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.
Preference shares
8.5% Non Cumulative Optionally Convertible Preference Shares (OCPS)
:The holder of OCPS is entitled to dividend @ Rs.8.50 per OCPS and
entitled to vote on issues relating to OCPS. Based upon a legal opinion
obtained by the Company, the option to convert the OCPS into Equity
Shares of the Company is not available as per the existing SEBI
guidelines.
Preference Shares amounting to Rs. 4,630.50 lacs are due for redemption
on 31.03.2015.
Surplus in Statement of Profit and Loss
(a) Out of the outstanding 8.5% Non Cumulative Optionally Convertible
Preference Shares (OCPS) of Rs. 100/- each, 13,10,000 OCPS were
redeemed in two equal installments of Rs. 6,55,00,000/- each on 1st
April 2012 and 1st April 2013, and 6,62,000 OCPS were partly redeemed
on 1st April 2013 and 31st March 2014. In order to comply with the
requirement of the Companies Act 1956, a total amount ofRs. 6,602.50
lakhs has been transferred to Capital Redemption Reserve Account up to
31 March 2014.
(b) General Reserve is a free reserve and is not meant for meeting any
specific liability, contingency or commitment.
Tangible assets
Note:
(a) Site, Water and Drainage System and Building (except at Kolkata)
are on leasehold land.
(b) Land includes free hold land Rs. 3.86 lacs( 31.03.2013 Rs.3.86
lacs)
(c) Plant and Machinery having a carrying value of Rs. 137.97 lacs as
on 31 March 2013 has been retired from active use during the year.
Consequently depreciation for the year includes the additional
depreciation of Rs. 137.97 lacs provided on these assets.
(d) Company has discharged the lease liability for one of its lease
hold plant & machinery consequent to that ownership has been
transferred in the name of the Company.
(e) Obligations under Finance Lease:
The Company has acquired Plant and Machinery under financial lease
arrangements. Minimum Lease Payments outstanding as at 31st March
2014and other particulars in respect of leased assets are as under:
The Company operates following post employment / other long term
defined benefits plans:
a. Funded
i. Gratuity
b. Nonfunded
i. Post Retirement Medical Benefit (PRMB)
ii. Compensated absence
iii. Long Service Award (LSA)
iv. OtherRetirementBenefit(ORB)
* Best estimate of Contribution expected to be paid in 2014-15 Rs. 400
Lacs (2013-14 : Rs. 350 Lacs) in respect of gratuity.
* 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
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.
3. Contingent Liabilities and commitments
Rs.in Lacs
As at 31.03.2014 As at 31.03.2013
Contingent Liabilities
A. Claims not acknowledged by
the Company
Excise $ 341.64 341.64
Customs 265.92 265.92
Sales Tax/CST*$ 2,104.64 2,605.05
Service Tax 2,805.49 2,799.47
Income Tax 2,045.36 310.56
ESI (Labour related) # 8.78 -
Others 149.00 149.00
B. Bills Discounted 8,410.18 7,134.52
*Other than demands amounting to Rs. 9.75 Lacs
(31st March 2013: Rs. 9.75 Lacs)
$ Other than items remanded back for fresh assessment.
# Company has been getting exemption till 31.12.2004. The Companies
application for exemption was pending for the period 01.01.2005 to
31.12.2010 before the ESI authorities, which was denied on alleged
technical ground. Company has filed an appeal before The Hon''ble
Jharkhand High Court, on which a stay has been granted. In the mean
time company received recovery notice for Rs. 8.78 lakhs for the period
01.01.2005 to 31.07.2005. No other demand has been raised by The ESI
Corporation in absence of which contingent liability for the period in
which exemption was denied is not ascertainable.
(b) Capital Commitments
Estimated value of contracts in capital account remaining to be
executed
[net of advances Rs. 116.47 lacs (31.03.2013
:Rs.139.85lacs) refernoteno.13] 1,868.44 2,387.63
* The Company had claimed a refund amounting to Rs 823.89 lacs
pertaining to sales tax on purchase of raw materials based on Bihar
Industrial Policy, 1995. This claim was up-held during 2002-03 by the
erstwhile Ranchi Bench of Patna High Court and was passed on to the
Joint Commissioner of Commercial Taxes (JCCT) for implementation.
Despite admittance of the refund claim in its entirety by JCCT, the
Commissioner of Commercial Taxes (CCT) reduced the claim to Rs.519.26
lacs and refunded the same over 2002-03 and 2003-04. The Company''s
Review petition before the Hon''ble High Court of Jharkhand against the
order of CCT had been rejected. Later on, the Company had filed a
Special Leav Petition (SLP) before Hon''ble Supreme Court. This SLP has
been disposed off with the direction to file an application before the
High Court and directed the High Court to decide the case on merit. The
application has already been filed before High Court Ranchi. The
balance claim amount outstanding at the year end is Rs. 304.63 lacs.
(31st March, 2013:Rs. 304 .63 lacs).
Segment Reporting
The Company''s operations are predominantly manufacture of Electrolytic
Tin Mill Product. The Company is managed organisationally as a unified
entity and according to the management this is a single segment Company
as envisaged in "Accounting Standard (AS 17) - Segment Reporting"
issued pursuant to Companies (Accounting Standards) Rules 2006.
The Company has an on-going conversion arrangement with Tata Steel
Limited which includes consignment agency and marketing arrangements,
and the Company is responsible for collection of debts on behalf of
Tata Steel Limited. Such debts (considered good) outstanding at
31.03.2014 amounts to ? 8,265.87 lacs (net of bills discounted of Rs.
2,602.48 lacs) [31.03.2013 : Rs. 11,915.96 lacs (net of bills
discounted of ?2,309.09 lacs)], of which Rs. 9.57 lacs (31.03.2013- Rs.
5.22 lacs) are overdue for more than six months.
Previous year''s figures have been regrouped where necessary to confirm
with figures for the current year.
Mar 31, 2013
1. General Corporate Information
The Tinplate Company of India Ltd.(TCIL) is the largest producer of tin
coated and tin free steel sheets in India. Having its headquarter in
Kolkata, the company''s works is located at Jamshedpur, Jharkhand. The
strategic goal of the company is to create and enhance value for the
stakeholders through growth and competitiveness and also to reach
status of supplier of choice for tin mill products in Asia.
2.01 The Company operates following post employment / other long term
defined benefits plans:
a. Funded
i. Gratuity
b. Nonfunded
i. Post Retirement Medical Benefit (PRMB)
ii. Compensatedabsence
iii. Long Service Award (LSA)
iv. Other Retirement Benefit (ORB)
2.02 Best estimate ofContribution expected to be paid in 2013-14 Rs.
350 lacs (2012-13:Rs. 395 Lacs) in respect ofgratuity.
2.03 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 ofthe assets are invested in PSU bonds and
Government Securities. Based on the asset allocation and prevailing
yield rates on these asset classes,thelongterm estimate oftheexpected
rateofreturnonthefund 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.
2.04 The estimate offuture salary increases take into account
inflation, seniority, promotion and other relevant factors.
Rs. in Lacs
As at
31.03.2013 As at
31.03.2012
3. Contingent Liabilities and commitments
(a) Contingent Liabilities
A. Guarantees to Banks on behalf of others - 469.81
B. Claims not acknowledged by the Company
Excise $ 341.64 451.43
Customs 265.92 265.92
Sales Tax/CST*$ 2,605.05 2,527.28
Service Tax 2,799.47 2,215.36
Income Tax 310.56 121.69
Others 149.00 149.00
C. Bills Discounted 7,134.52 2,799.28
*Other than demands amounting to Rs. 9.75 lacs (31st March 2012 : Rs.
9.75Lacs)
$ Other than items remanded back for fresh assessment.
4 The Company had claimed a refund amounting to Rs. 823.89 lacs
pertaining to sales tax on purchase of raw materials based on Bihar
Industrial Policy, 1995. This claim was up-held during 2002-03 bythe
erstwhile Ranchi Bench of Patna High Court and was passsed on to
theJoint CommissionerofCommercial Taxes (JCCT) for implementation.
Despite admittance ofthe refund claim in its entirety by JCCT, the
Commissioner of Commercial Taxes (CCT) reduced the claim toRs. 519.26
lacs and refunded the same over 2002-03 and 2003-04. The Company''s
Review petition before the Hon''ble High Court ofJharkhand against the
order ofCCT had been rejected. Later on,the Company had filed a Special
Leave Petition before Hon''ble Supreme Court for final disposal, which
is pending. The balance claim amount outstanding at the yearend is Rs.
304.63 lacs. (31st March, 2012 : Rs. 304.63 Lacs).
(a) As per the legal opinion obtained by the Company, the option to
convert the Optionally Convertible Preference Shares (OCPS) into Equity
Shares ofthe Company is not available as perthe existing SEBI
guidelines. Accordingly such shares have not been considered as
potential equity shares for the purpose of computation of Diluted
Earnings pershare.
5. Segment Reporting
The Company''s operations are predominantly manufacture of Electrolytic
Tin Mill Product. The Company is managed organisationally as a unified
entity and according to the management this is a single segment Company
as envisaged inAS17 issued pursuant to Companies (Accounting Standards)
Rules 2006.
6. The Company has an on-going conversion arrangement with Tata Steel
Limited which includes consignment agency and marketing arrangements,
and the Company is responsible for collection of debts on behalf of
Tata Steel Limited. Such debts (considered good) outstanding at
31.03.2013 amounts to Rs. 11,915.96 lacs ( net of bills discounted of
Rs. 2,309.09 lacs) [ 31.03.2012 : Rs. 8,688.13 lacs (net of bills
discounted of Rs. 6,262.08 lacs)], of which Rs. 5.22 lacs (31.03.2012-
Rs. 6.84 lacs) are overdue for more than six months.
7. Previous year''s figures have been regrouped/reclassified where
necessary to correspond with the current year''s classification
/disclosure.
Mar 31, 2012
1. CONTINGENT LIABILITIES Rs. in Lakhs
As at As at
31st March 2012 31st March 2011
A. Guarantees to Banks and
Financial Institutions on
behalf of others 469.81 875.34
B. Claims not acknowledged
by the Company
Excise $ 451.43 308.36
Customs 265.92 265.92
Sales Tax/ GST*$ 2,527.28 2,811.26
Service Tax 2,215.36 -
IncomeTax 121.69 32.14
Others 149.00 68.00
C. Bills Discounted 2,799.28 2,592.03
* Other than demands amounting to Rs. 9.75 Lakhs (31st March 2011:Rs.
536.20 Lakhs) pertaining to issues settled in Company's favour in
earlier years.
$ Other than items remanded back for fresh assessment.
2. The Company operates following post employment / other long term
defined benefits plans:
a. Funded
i. Gratuity
b. Unfunded
i. Post Retirement Medical Benefit (PRMB)
ii. Leave
iii. Long Service Award (LSA)
iv. Other Retirement Benefit (ORB)
3. Best estimate of Contribution expected to be paid in 2012-2013 Rs.
395 Lakhs (2010-2011: Rs. 350 Lakhs) in respect of gratuity.
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
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.
5. The estimate of future salary increases take into account
inflation, seniority, promotion and other relevant factors.
6. In addition to post employment/other long term defined benefit
plans as set out in Note 27.1 above, the Company also provides
Provident Fund benefit to its employees through a Trust, managed by the
Company in line with the Provident Fund and Miscellaneous Provisions
Act, 1952. Provident Fund contributions (both employer's and
employees') are made to the Trust. The Plan guarantees interest at the
rate notified annually by the Provident Fund Authorities irrespective
of the interest earnings of the Fund for distribution to the Provident
Fund Members. Shortfall in the interest rate, if any, is required to be
made good by the Company. The actuary of the Company has determined the
related liability of the Company using Projected Unit Credit Method and
based thereon there is no shortfall in the interest rate guarantee
obligation of the Company at the year end. Further, during the year,
the Company's contribution of Rs. 314.25 Lakhs (2010-11 : Rs. 277.89 Lakhs)
to the Provident Fund Trust has been expensed under' Contribution to
provident and other funds'. Disclosures given here under are restricted
to the Information available as per the Actuary's report.
7. The Company had claimed a refund amounting to Rs. 823.89 Lakhs
pertaining to sales tax on purchase of raw materials based on Bihar
Industrial Policy, 1995. This claim was up-held during 2002-03 by the
erstwhile Ranchi Bench of Patna High Court and was passed on to the
Joint Commissioner of Commercial Taxes (JCCT) for implementation.
Despite admittance of the refund claim in its entirety by JCCT, the
Commissioner of Commercial Taxes (CCT) reduced the claim to Rs. 519.26
Lakhs and refunded the same over 2002-03 and 2003-04. The Company's
Review petition before the Hon'ble High Court of Jharkhand against the
order of CCT had been rejected. Later on, the Company had filed a
Special Leave Petition before Hon'ble Supreme Court for final disposal,
which is pending. The balance claim amount outstanding at the year end
is Rs. 304.63 Lakhs. (31 st March 2011 - Rs. 304.63 Lakhs).
8. SEGMENT REPORTING
The Company's operations are predominantly manufacture of
Electrolytic in Mill Product. The Company is managed organizationally
as a unified entity and according to the management this is a single
segment Company as envisaged in AS 17 issued pursuant to Companies
(Accounting Standards) Rules 2006.
Sales (gross) for the year ended 31st March 2012 of Rs. 23111.98 Lakhs
(2010-2011 :Rs. 47566.09 Lakhs) includes domestic sales of Rs. 2119.27
Lakhs (2010-2011 : Rs. 18287.14 Lakhs). Details of export sales and year
end debtors (being related capital employed overseas), are as follows :
9. The Company has an ongoing conversion arrangement with Tata Steel
which includes consignment agency and marketing arrangements, and the
Company is responsible for collection of debts on behalf of Tata Steel.
Such debts (considered good) outstanding at the year-end amount to Rs.
8688.13 Lakhs (net of discounted bills ofRs. 6262.08 Lakhs) [ 31st March
2011 Rs. 1737.57 Lakhs (net of discounted bills of Rs. 3209.11 Lakhs)], of
which Rs. 6.84 Lakhs [(31st March 2011 Rs. 37.61 Lakhs) are overdue for
more than six months].
10. PREVIOUS YEAR FIGURES
The financial statements for the year ended 31 March 2011 had been
prepared as per the then applicable, pre-revised Schedule VI to the
Companies Act, 1956.Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956, the financial statements for the year
ended 31 March 2012 are prepared as per Revised Schedule VI.
Accordingly, the previous year's figures have been reclassified to
conform to this year's classification.
Mar 31, 2011
1. Directors' Remuneration:
(d) Directors' remuneration does not include retirement benefit of Rs.
19.98 Lakhs (2009-10 Rs. 31.65 Lakhs) paid to the former Managing
Director.
2. The Company had claimed a refund amounting to Rs. 823.89 Lakhs
pertaining to sales tax on purchase of raw materials based on Bihar
Industrial Policy, 1995. This claim was up-held during 2002-03 by the
erstwhile Ranchi Bench of Patna High Court and was passed on to the
Joint Commissioner of Commercial Taxes (JCCT) for implementation.
Despite admittance of the refund claim in its entirety by JCCT, the
Commissioner of Commercial Taxes (CCT) reduced the claim to Rs. 519.26
Lakhs and refunded the same over 2002-03 and 2003-04. The Company's
Review petition before the Hon'ble High Court of Jharkhand against the
order of CCT had been rejected. Later on, the Company had filed a
Special Leave Petition before Hon'ble Supreme Court for final disposal,
which is pending. The balance claim amount outstanding at the year end
is Rs. 304.63 Lakhs (31st March 2010 - Rs. 304.63 Lakhs).
3. There are Contingent Liabilities in respect of:
3.1 Bank Guarantee given by the Company in connection with various
matters amounting to Rs. 875.34 Lakhs (31st March 2010 : Rs. 726.03
Lakhs).
3.2 Bills discounted Rs. 2592.03 Lakhs (31st March 2010 : Rs. 7929.13
Lakhs)
3.3 Claims not acknowledged as debts by the Company :
31st March, 31st March,
2011 Rupees 2010 Rupees
Lakhs Lakhs
i) Customs Duty 265.92 265.92
ii) Sales Tax (estimated by
management)* $ 2811.26 2855.62
iii) Excise Duty $ 308.36 343.19
iv) Provident Fund - 19.12
v) Others 100.14 113.71
* Other than demands amounting to Rs. 536.20 Lakhs (3lst March 2010 :
Rs. 536.20 Lakhs) pertaining to issues settled in Company's favour in
earlier years.
$ Other than items remanded back for fresh assessment
4. Disclosure in respect of Employee Benefits in keeping with
Accounting Standard 15
4.1 The Company's Provident Fund is exempted under Section 17 of
Employees' Provident Fund Act, 1952. Conditions for grant of exemption
stipulate that the employer shall make good deficiency, if any, in the
interest rate declared by Trust over statutory limit. Having regard to
the assets of the Fund and the return on the investments, the Company
does not expect any deficiency in the foreseeable future.
4.2 The Company operates following post employment/other long term
defined benefits :
a. Funded
i. Gratuity
b. Unfunded
i. Post Retirement Medical Benefit (PRMB)
ii. Leave
iii. Long Service Award (LSA)
iv. Other Retirement Benefits (ORB)
5.1. Actual return on Plan assests - 8.26% (2009-10 : 8.00%)
5.2. Best estimate of Contribution expected to be paid in 2011-2012
Rs. 350 Lakhs (2010-2011 : Rs. 165 Lakhs) in respect of gratuity.
5.3. 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 and
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.
5.4. The estimate of future salary increases take into account
inflation, seniority, promotion and other relevant factors.
6. The Company's operations predominantly is manufacture of
Electrolytic Tinplate in course of which certain intermediate product
namely Full hard cold rolled coils in small quantity are also produced
and marketed. The Company is managed organizationally as a unified
entity and all its assets other than export debtors are located in
India.
Sales (gross) for the year ended 31st March, 2011 of Rs 47753.01 Lakhs
( 2009-2010 : Rs. 42861.33 Lakhs) includes domestic sales of Rs.
18474.05 Lakhs (2009-2010 : Rs. 12414.33 Lakhs). Details of export
sales and year end debtors (being related capital employed overseas),
are as follows:
(iii) For fixed assets (tangibles and intangibles) additions, refer
column 2 of Fixed Assets Schedule (Schedule D)
7. The Company has an ongoing conversion arrangement with Tata Steel
which includes consignment agency and marketing arrangements, and the
Company is responsible for collection of debts on behalf of Tata Steel.
Such debts (considered good) outstanding at the year-end amount to Rs.
1737.57 Lakhs (net of discounted bills of Rs. 3209.11Lakhs) [31 st
March 2010 Rs 1395.30 Lakhs (net of discounted bills of Rs. 3641.56
Lakhs)], of which Rs. 44.39 Lakhs (31st March 2010 Rs. 36.60 Lakhs) are
outstanding for more than six months.
8. Related Party Disclosures in keeping with Accounting Standard 18 :
a) Related Parties
Name Relationship
Tata Steel Limited (TSL) The Company is an Associate
Company of Tata Steel
Mr. B.L. Raina (BLR), Managing
Director (MD - up to 16.06.2009) Key Management Personnel
Mr. Tarun Kumar Daga (TKD),
[Executive Director(ED) up to
16.06.2009] Key Management Personnel
(MD-from 17.06.2009)
9. (a) The Company has since issued and allotted on 1st April, 2011,
32704209 Equity Shares of Rs. 10/- each at premium of Rs. 45/- per
Equity Shares against conversion of 17987315 3% Fully Convertible
Debentures of Rs. 100/- each outstanding at the year end. Such Equity
Shares are entitled to dividend for the year in keeping with the terms
of the issue and related SEBI Guidelines.
10. basic and Diluted Earnings per share :
(B) Diluted
a) Adjusted after taking into consideration fair value per share prior
to Rights Issue and theoretical ex- right fair value per share.
b) Based upon a legal opinion obtained by the Company, the option to
convert the Optionally Convertible Preference Shares (OCPS) into Equity
Shares of the Company is not available as per the existing SEBI
guidelines. Accordingly such shares have not been considered as
potential equity shares for the purpose of computation of Diluted
Earning per share.
11. Figures of the previous year have been rearranged and regrouped
wherever necessary.
Mar 31, 2010
1. The Company had claimed a refund amounting to Rs. 823.89 Lakhs
pertaining to sales tax on purchase of raw materials based on Bihar
Industrial Policy, 1995. This claim was up-held during 2002-03 by the
erstwhile Ranchi Bench of Patna High Court and was passed on to the
Joint Commissioner of Commercial Taxes (JCCT) for implementation.
Despite admittance of the refund claim in its entirety by JCCT, the
Commissioner of Commercial Taxes (CCT) reduced the claim to Rs. 519.26
Lakhs and refunded the same over 2002-03 and 2003-04. The Companys
Review petition before the Honble High Court of Jharkhand against the
order of CCT had been rejected. Later on, the Company had filed a
Special Leave Petition before Honble Supreme Court for final disposal,
which is pending. The balance claim amount outstanding at the year end
is Rs. 304.63 Lakhs.
2. There are Contingent Liabilities in respect of:
2.1 Bank Guarantee given by the Company in connection with various
matter amounts to Rs. 726.03 Lakhs (31st March 2009 - Rs. Nil).
2.2 Bills discounted Rs. 7929.13 Lakhs (31st March 2009: Rs. 1486.51
Lakhs)
2.3 Claims not acknowledged as debts by the Company :
31st March, 2010 31st March, 2009
Rupees Lakhs Rupees Lakhs
i) Customs Duty 265.92 265.92
ii) Sales Tax (estimated by
management)* $ 2855.62 2475.85
iii) Excise Duty $ 343.19 456.39
iv) Provident Fund 19.12 19.12
v) Others 113.71 83.00
* Other than demands amounting to Rs. 536.20 Lakhs (31st March 2009 :
Rs. 536.20 Lakhs)
pertaining to issues settled in Companys favour in earlier years. $
Other than items remanded back for fresh assessment.
3. Disclosure in respect of Employee Benefits in keeping with
Accounting Standard 15.
3.1 The Companys Provident Fund is exempted under Sectionl 7 of
Employees Provident Fund Act, 1952. Conditions for grant of exemption
stipulate that the employer shall make good deficiency, if any, in the
interest rate declared by Trust over statutory limit. Having regard to
the assets of the Fund and the return on the investments, the Company
does not expect any deficiency in the foreseeable future.
3.2 The Company operates following post employment/other long term
defined benefits :
a. Funded
i. Gratuity
b. Unfunded
i. Post Retirement Medical Benefit (PRMB)
ii. Leave
iii. Long Service Award
iv. Other Retirement Benefits
3.3. Best estimate of Contribution expected to be paid in 2010-2011
Rs.165 Lakhs (2009-2010: Rs. 150 Lakhs) in respect of gratuity.
3.4. 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
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 govt, bonds.
3.5. The estimate of future salary increases take into account
inflation, seniority, promotion and other relevant factors.
4. The Company has an ongoing conversion arrangement with Tata Steel
which includes consignment agency and marketing arrangements, and the
Company is responsible for collection of debts on behalf of Tata Steel.
Such debts (considered good) outstanding at the year-end amount to Rs.
1395.30 Lakhs (net of discounted bills of Rs 3641.56 Lakhs) [31st March
2009 Rs. 1932.30 Lakhs (net of discounted bills of Rs. 1997.13 Lakhs)],
of which Rs. 36.60 Lakhs (31st March 2009 Rs. 79.10 Lakhs) are
outstanding for more than six months.
5. In respect of the Companys simultaneous but unlinked Rights Issue
of 4,31,90,851 Equity Shares of Rs. 10 each at a premium of Rs. 35 per
share and 1,79,96,188, 3% Fully Convertible Debentures of Rs. 100 each
(FCDs) which opened on 17th September, 2009 and closed on 1st October,
2009, 4,31,69,528 Equity Shares and 1,79,87,315 FCDs aggregating
Rs.37,413.60 lakhs were allotted on 12th October, 2009.
6. Figures of the previous year have been rearranged and regrouped
wherever necessary.
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