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Notes to Accounts of Tube Investments of India Ltd.

Mar 31, 2023

The Company''s Investment Property consists of two properties in Mumbai lying vacant and two properties in Chennai, one lying vacant and one let out on rent with a lease term of less than 12 months.

On transition to Ind AS (i.e. 1st April 2016), the Company has elected to continue with the carrying value of all Investment Properties measured as per the previous GAAP and use that carrying value as the deemed cost of Investment Property.

The fair value of the investment properties are determined by an accredited Independent valuer, who is a specialist in valuing these types of investment properties and is a registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The valuation model in accordance with that recommended by the Valuation Standards Committee has been applied. The resulting Fair Value Estimates are classified under Level 3 of the Fair Value Hierarchy (Refer Note 41.2).

The Company has no restrictions on the disposal of its Investment Property and no contractual obligations to purchase, construct or develop Investment Property or for Repairs, Maintenance and Enhancements.

i) During the year, the Company converted its balance 8,52,33,645 Share Warrants into equal number of Equity shares of its subsidiary, M/s. CG Power and Industrial Solutions Limited by remitting ''54.72 Cr. payable on conversion taking the equity holding of the company in CGPISL to 58.05%.

ii) During the year, pursuant to the Share Purchase and Shareholders Agreement entered with M/s Moshine Electronics Private Limited and its promoters, the Company has acquired 20,66,628 equity shares representing 76% of its paid up equity share capital for a total purchase consideration of ''7.38 Cr.

iii) During the year, the company was allotted 10,753 shares of face value of ''10/- each, fully paid up, representing 50% of paid up share capital of M/s X2Fuels and Energy Private Limited (“X2Fuels”) for a consideration of ''6.15 Cr. pursuant to the Shares Subscription Agreement executed between the Company, X2Fuels and other parties to Share Subscription Agreement.

iv) The Company had incorporated M/s. TI Clean Mobility Private Limited (“TICMPL”) in February 2022 to focus on clean mobility solutions. During the year, the Company has further invested ''150 Crs in TICMPL, by way of subscription to equity shares at face value of ''10 each and the Company has so far invested ''250 Cr. in equity shares of TICMPL. The Company along with TICMPL, executed Securities Subscription Agreements (SSAs) with M/s. Multiples Private Equity Fund III, M/s. Multiples Private Equity Fund IV, M/s. Multiples Private Equity Gift Fund IV & and their Co-Investors (together “Investor”) for investment in TICMPL. As per the terms of the SSAs, TII will be investing ''500 Cr. towards subscription to Series B CCPS and Investors will be investing ''1200 Cr. towards subscription to equity shares & Series A1 CCPS. In this connection, on 28th March 2023, the Investors were allotted equity shares & Series A1 CCPS for ''400 Cr. and on 30th March 2023, TII was allotted Series B CCPS for ''167 Cr. in TICMPL.

v) During the year, considering the economic crisis in Sri Lanka and current market conditions of Bicycle Industry in India, the Company has recognized an impairment provision of ''23.45 Cr. in respect of Investments made in its Sri Lankan Subsidiaries.

Note 32. Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Company''s Standalone Financial Statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a. Judgements

I n the process of applying the Company''s accounting policies, management has made the following judgement, which has significant effect on the amounts recognised in the Standalone Financial Statements.

i. Leases

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow.

Refer Note 39 for information on potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

b. Estimates and Assumptions

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

i. Impairment of Non-Financial assets including Investment in Subsidiaries

I mpairment exists when the carrying value of an asset or cash generating unit, exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model.

ii. Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

iii. Revenue from Contract with Customers

The Company estimates variable considerations to be included in the transaction price for the sale of goods with rights of return and volume rebates. The Company''s expected volume rebates are analysed on a per customer basis for contracts that are subject to volume threshold. Determining whether a customer will be likely entitled to rebate will depend on the customer''s rebates entitlement and accumulated purchases to date.

iv. Allowances for Slow / Non moving Inventory and Obsolescence

An allowance for Inventory is recognised for cases where the realisable value is estimated to be lower than the inventory carrying value. The inventory allowance is estimated taking into account various factors, including prevailing sales prices of inventory item and losses associated with obsolete / slow-moving / redundant inventory items. The Company has, based on these assessments, made adequate provision in the books.

v. Employee Benefits

The cost of the defined benefit gratuity plan and other post-employment leave encashment benefit and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. In determining the appropriate discount rate, the management considers the interest rates of government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit obligations are given in Note 35.

vi. Fair Value Measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible,

a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, Credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 41 for further disclosures.

Note 33. Standards issued but not yet effective

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023

(i) Definition of Accounting Estimates - Amendments to Ind AS 8

The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.

The amendments are effective for annual reporting periods beginning on or after 1st April 2023 and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period.

(ii) Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant'' accounting policies with a requirement to disclose their ‘material'' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments to Ind AS 1 are applicable for annual periods beginning on or after 1st April 2023. Consequential amendments have been made in Ind AS 107.

The entity is currently revisiting their accounting policy information disclosures to ensure consistency with the amended requirements.

iii) Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences.

The amendments should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, at the beginning of the earliest comparative period presented, a deferred tax asset (provided that sufficient taxable profit is available) and a deferred tax liability should also be recognised for all deductible and taxable temporary differences associated with leases and decommissioning obligations. Consequential amendments have been made in Ind AS 101. The amendments to Ind AS 12 are applicable for annual periods beginning on or after 1st April 2023. The entity is currently assessing the impact of the amendments.

Note 34. Stock Options

During the year fresh grant of 1,89,800 options under ESOP 2017 scheme was approved by the Nomination and Remuneration Committee of the Board of Directors of the Company.

With reference to the grants approved by the Nomination and Remuneration Committee of the Board of Directors of the Company, the Company has recognised expense amounting to ''7.85 Cr. (Previous Year - ''0.58 Cr.) for employees services received during the year, shown under Salaries, Wages and Bonus (Refer Note 23).

i. The entire Plan Assets are invested in insurer managed funds with Life Insurance Corporation of India (LIC).

ii. The expected/actual return on Plan Assets is as furnished by LIC.

iii. The estimate of future salary increase takes into account inflation, likely increments, promotions and other relevant factors. b. Provident Fund

The Company''s Provident Fund is exempted under Section 17 of the The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust (including any decrease in value of investments) and the notified interest rate. The exempt provident fund set up by the company is a defined benefit plan under Ind AS 19 - Employee Benefits.

There is net asset position as at 31st March 2023 and 31st March 2022, the same has not been recognized in the books.

d. Contributions to Defined Contribution Plans

During the year, the Company recognised ''4.85 Cr. (Previous year - ''5.70 Cr.) to Provident Fund under Defined Contribution Plan, ''8.56 Cr. (Previous year - ''7.81 Cr.) for Contributions to Superannuation Fund, ''0.86 Cr. (Previous year - ''0.60 Cr.) for Contributions to Employee State Insurance Scheme and ''0.24 Cr. (Previous Year - ''0.20 Cr.) for Contribution to National Pension Scheme in the Statement of Profit and Loss.

Note 36a. Contingent LiabilitiesNote i

a) Matters wherein managament has concluded the Company''s liability to be probable have accordingly been provided for in the books. Also Refer note 16

b) Matters wherein managament has concluded the Company’s liability to be possible have accordingly been disclosed under Note 36a ii Contingent liabilities below

c) Matters wherin management is confident of succeding in these litigations and have concluded the Company’s liability to be remote. This based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process

Note ii: Contingent Liabilities

'' in Crores

Particulars

As at

31-Mar-2023

As at

31-Mar-2022

(i)

Disputed Income-Tax demands under appeal / remand pending before various appellate/ assessing authorities against the Company (including interest and penalty).

3.22

-

(ii)

Disputed Service Tax, Excise and Customs duty demand pertaining to financial years 2001-02 to 2002-2003 under appeal pending before the Appellate Tribunal. The Management is of the opinion that the above demands are arbitrary and are not sustainable

-

0.11

(iii)

Claims against the Company not acknowledged as debts

0.60

0.69

(iv)

Amounts payable to employees with respect to retrospective applicability of amendments to the Payment of Bonus Act, 1965 in respect of FY 2014-15, pending at High Court under a writ petition. The Management is of the opinion that the above retrospective amendment is not sustainable.

2.61

2.61

Notes:

(a) Draft Assessment Orders received from IT Authorities and Show Cause Notices received from various other government authorities, pending adjudication, have been assessed by the management and considered appropriately in the standalone financial statements.

(b) The uncertainties and possible reimbursement in respect of the above mentioned contingent liabilities are dependent on the outcome of various legal proceedings and therefore, cannot be predicted accurately.

(c) The Company considers the Cash flow in each of the cases to be uncertain and hence considered as Contingent Liabilities.

Note 36b. Commitments

'' in Crores

Particulars

As at

31-Mar-2023

As at

31-Mar-2022

(i) Estimated amount of contracts remaining to be executed on capital expenditure and not provided for

135.14

72.85

(ii) Export obligation under EPCG to be fulfilled. The Company is confident of meeting its obligations under the Schemes within the Stipulated Period.

94.90

96.65

Note 38. Segment Information

Effective 1st April 2021, the Company has re-organised certain business units and its operating structure and in view of the structural changes, the Chief Operating Decision Maker (CODM) reviews the business as three primary segments -“Engineering”, “Metal Formed Products” and “Mobility”, and in accordance with the core principles of IND AS 108 - ‘Operating Segments'', these have been considered as the reportable segments of the Company.

The Management Committee headed by Managing Director (CODM) consisting of Chief financial officer, Leaders of Strategic Business Units and Human resources have identified the above three reportable operating segments. It reviews and monitors the operating results of the operating segments for the purpose of making decisions about resource allocation and performance assessment using profit or loss and return on capital employed.

The Engineering segment comprises of cold rolled steel strips and precision steel tube viz., Cold Drawn Welded tubes (CDW) and Electric Resistance Welded tubes (ERW). The Metal Formed Products segment comprises of Automotive chains, fine blanked products, stamped products, roll-formed car doorframes and cold rolled formed sections for railway wagons and passenger coaches.The Mobility segment comprises of Standard bi-cycles, Special bi-cycles including alloy bikes and Speciality performance bikes and fitness equipment. The Industrial chains and new business namely, Optic Lens, TMT Bars, Truck Body Building and TI Machine building are reported as Others for the purpose of segment reporting.

Segment assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment.

Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

Transfer prices between operating segments are on an arm''s length basis in a manner similar to transactions with third parties.

Note 39. Leases

The Company has lease contracts for Land and Building used for the purpose of Warehouses and Factories. Leases of such assets generally have lease terms between 2 and 95 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain certain financial ratios. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

The Company also has certain leases of machinery with lease terms of 12 months or less. The Company applies the ‘shortterm lease'' recognition exemptions for these leases.

The carrying amounts of right-of-use assets recognised and the movements during the period is explained in Note No.4b

Set out below are the carrying amounts of lease liabilities included under financial liabilities and the movements during the period:

The Company had total cash outflows for leases (including short term leases) of ''10.83 Cr. in 31st March 2023 (''10.95 Cr. during the year ended 31st March 2022). The Company also had non-cash additions to right-of-use assets and lease liabilities of ''1.62 Cr. during the year (''1.72 Cr. during the year ended 31st March 2022). There are no future cash outflows relating to leases that have not yet commenced.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises some or certain judgements in determining whether these extension and termination options are reasonably certain to be exercised (see Note 32).

The company does not expect undiscounted potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term

The management assessed that cash and cash equivalents, trade receivables, loans, current investments, other financial assets, short term borrowings, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

ii. The fair values of certain unquoted equity investments have been estimated using Discounted Cash-flow Model (DCF). The valuation is based on certain assumptions like forecast cash-flows, discount rate, etc.

iii. Derivatives are fair valued using market observable rates and published prices.

Note 42. Financial Risk Management Objectives and Policies

The Company''s principal financial liabilities, other than derivatives, comprise of borrowings and trade payables. The main purpose of these financial liabilities is to raise finance for the Company''s operations. The Company has various financial assets such as trade receivables, cash and short-term deposits, which arise directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken

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 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 i Foreign Currency Exchange Rate Risk

The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective Company.

The Company, as per its forex policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its forex policy The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 5%.

Conversely, 5% depreciation in the USD and Euro rates against the significant foreign currencies as at 31st March 2023 and 31st March 2022 would have had the same but opposite effect, again holding all other variables constant.

ii Equity Price Risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The majority of the Company''s investments are in the shares of group companies, which are carried at cost. The Company has investments in other equity investments, of only ''8.74 Cr. as at 31st March 2023. (As at 31st March 2022 - ''8.52 Cr).

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 trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.

Exposure to Credit risk - The carrying amount of financial assets represents the maximum Credit exposure. The maximum exposure to Credit risk was ''1,526.10 Cr. as at 31st March 2023 and ''1,151.10 Cr. as at 31st March 2022, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, derivative instruments, mutual fund investments and other financial assets excluding equity investments.

Credit risk from balances with banks and investment of surplus funds in mutual funds is managed by the Company''s treasury department. The objective is to minimise the concentration of risks and therefore mitigate financial loss.

Of the above, ''160.75 Cr. (Previous year - ''172.02 Cr.) is backed by Export Credit Guarantee Cover / Letter of Credit as at 31st March 2023.

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. Furthermore, the Company has access to funds from debt markets through commercial paper, non-convertible debentures, and other debt instruments. 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 risks.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

Note 43. 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 internal accruals, nonconvertible debentures, external commercial borrowings 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 capital employed using a Debt equity ratio, which is total debt divided by total equity and maturity profile of the overall debt portfolio of the Company.

There have been no breaches in the financial covenants of any interest-bearing loans and borrowings in the current period.

Note 46. Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iii) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

(iv) During the year, the Company has further invested ''150 Cr. by way of equity, ''167 Cr. through CCPS and provided ''325 Cr. as intercorporate deposits (refer note 6c) to its Subsidiary, TI Clean Mobility Private Limited (“TICMPL” CIN-U34300TN2022PTC149904) to pursue and engage in clean mobility business. Subsequently, TICMPL acquired 65.2% of equity share capital of IPLTech Electric Private Limited (IPLT, CIN-U73100HR2019PTC081891) by way of Primary and Secondary acquisition for a consideration of ''245.41 Cr on 21st September 2022. TICMPL also acquired the remaining

30.05% from the existing shareholders of Cellestial E Mobility Private Limited (CEMPL, CIN-U35999TG2019PTC131892) for a consideration of ''50.90 Crores on 3rd February 2023 and obtained 100% control over CEMPL.

The Company has complied with the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and the Companies Act for the above transactions and are not violative of the Prevention of Money-Laundering Act, 2002 (15 of 2003).

(v) The Company has not received any fund from any person or entity, including foreign entities (Funding Parties) with the understanding (whether recorded in writing or otherwise) that the Company shall -:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vi) The Company has not made any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,1961 (such as search or survey or any other relavent provision of the Income Tax Act, 1961).

Note 47. Previous Year’s figures

The Company has reclassified / regrouped previous year figures to conform to this year''s classification.


Mar 31, 2022

The Company''s Investment Property consists of two properties in Mumbai lying vacant and two properties in Chennai, one lying vacant and one let out on rent with a lease term of less than 12 months.

The fair value of the investment properties are determined by an accredited Independent valuer, who is a specialist in valuing these types of investment properties and is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The valuation model in accordance with that recommended by the Valuation Standards Committee has been applied. The resulting Fair Value Estimates are classified under Level 3 of the Fair Value Hierarchy (Refer Note 41.2).

The Company has no restrictions on the disposal of its Investment Property and no contractual obligations to purchase, construct or develop Investment Property or for Repairs, Maintenance and Enhancements.

i) During the year ended 31st March 2021, the Company had invested ''654.18 Cr. (including capitalisation of cost) in M/s CG Power and Industrial Solutions Limited ("CGPISL") towards allotment of 71,12,51,887 equity shares (including premium) and an upfront consideration of ''37.50 Cr. representing 25% for allotment of 17,52,33,645 warrants convertible into equal number of equity shares within 18 months, upon payment of balance 75% consideration. During the current year, the Company converted 9,00,00,000 of the outstanding Share Warrants into Equity for a balance consideration of ''57.78 Cr., taking the equity holding of the Company to 55.57%. The Company holds 58.05% on fully diluted basis (i.e. assuming conversion of all the warrants into equity shares) in CGPISL as at 31st March 2022.

ii) During the year, the Company has incorporated a wholly owned subsidiary viz., TI Clean Mobility Private Limited ("TICMPL") to pursue and engage in Clean Mobility business interests and electric three-wheeler business with an equity investment of ''100 Cr. TICMPL acquired 1,41,677 equity shares of the face value of ''10/- each, representing about 69.95% of the subscribed and paid up share capital of M/s Cellestial E-Mobility Private Limited ("CEMPL"), a Company engaged in design and manufacture of electric tractors, aviation ground support electric equipment and other electric machinery. TICMPL has joint control over CEMPL.

iii) During the year, the Company was allotted 4,151 equity shares of face value of ''10/- each, fully paid up, representing 27.78% of paid up share capital of M/s Aerostrovilos Energy Private Limited ("AEPL") for a consideration of ''3.46 Cr., pursuant to the Shares Subscription Agreement executed between the Company and AEPL.

iv) Consequent to discontinuance of TI Tsubamex Private Limited ("TTPL") operations, sale of its assets and settling of its liabilities, the Company''s application with the Registrar of Companies, Chennai (ROC) for striking off TTPL''s name from the Register of Companies has been approved in the current year. Accordingly, the investment have been set off against the provisions in the current year.

Investments at fair value through OCI (fully paid) reflect investment in unquoted equity securities and quoted debt securities. The Company has designated the unquoted equity securities as FVTOCI on the basis that these are not held for trading. (Refer Note 41.1 for determination of their Fair Values)

There are no loans and advances which are either repayable on demand or are without specifying any terms or period of repayment.

Loans are non-derivative financial assets which generate a fixed interest income for the Company and measured at amortised cost. The carrying amount may be affected by the changes in the credit risk of the counter parties.

Trade Receivables are non-interest bearing and are generally have Credit period to a maximum of 120 days. For terms and conditions relating to Related Party receivables (Refer Note 37). There are no debts due by directors or other officers of the Company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any director is a partner or a director or a member.

During the year, the Company has invested an aggregate amount of ''2,063.00 Cr. (Previous Year ''2,476.00 Cr.) in the units of various Cash Management Schemes of mutual funds, for the purpose of deployment of temporary cash surplus and has ''280.45 Cr. (Previous Year ''304.30 Cr.) in mutual funds as at year end. The total consideration received on the sale of units during the year was ''2,095.19 Cr. (Previous Year ''2,270.66 Cr.)

b) Terms / Rights attached to class of shares

The Company has only one class of shares referred to as Equity Shares having a par value of ''1 each. The holders of Equity Shares are entitled to one vote per share. Dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting. Repayment of capital will be in proportion to the number of equity shares held by the shareholders.

d) Status on Global Depository Receipts (GDRs)

The aggregate number of GDRs deemed to be outstanding as at 31st March 2022 is 9,300 (As at 31st March 2021 -9,300) each representing one Equity Share of ''1 face value. GDR % against total number of shares is 0.005% (Previous Year - 0.005%). The GDRs carry the same terms/rights attached to Equity Shares of the Company. The aforesaid GDRs are not listed in any Stock Exchange.

e) During the previous year, the Company had allotted 47,83,380 shares to eligible investors on preferential basis at ''731.70 Cr. (including premium) for an aggregate consideration of ''350 Cr.

f) Details of promoter group shareholding is provided in Note no. 45.

a. General Reserve - Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013. Additions to the general reserve is on account of cancellation of share options post vesting period.

b. Securities Premium - The Securities premium received during the year represents the premium received towards allotment of 1,33,350 shares. This balance will be utilised in accordance with the provisions of Section 52 of the Companies Act, 2013 towards issuance of fully paid bonus shares, write-off of preliminary expenses, commission / discount expenses on issue of shares / debentures, premium payable on redemption of redeemable preference shares / debentures and buyback of its own shares / securities under Section 68 of the Companies Act, 2013.

Note: Previous year includes share premium of ''342.50 Cr. (net of expenses amounting to ''7.02 Cr.) on account of 47,83,380 shares of the Company allotted on preferential basis to eligible investors at ''731.70 per share (including premium) for an aggregate consideration of ''350 Cr. (Refer Note 11(e)).

e. Cash Flow Hedge Reserve - The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged item.

A provision is recognised for expected warranty claims on products sold during the last one year (2 years in respect of certain components), based on past experience of the level of returns. It is expected that most of these costs will be incurred within one year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the applicable warranty period for all products sold.

Proposed Dividend on Equity Shares are subject to approval at the Annual General Meeting and are not recognised as a Liability as at 31st March.

With effect from 1st April, 2020 the Dividend Distribution Tax (''DDT'') payable by the Company under section 115O of Income Tax Act, 1961 was abolished and a withholding tax was introduced on the payment of dividend. As a result, dividend is now taxable in the hands of the recipient.

Note on Social Security Code: The date on which the Code of Social Security, 2020 (''The Code'') relating to employee benefits during employment and post-employment benefits will come into effect is yet to be notified and the related rules are yet to be finalised. The Company will evaluate the code and its rules, assess the impact, if any and account for the same once they become effective.

During the year, M/s TI Tsubamex Private Limited ("TTPL"), a Joint venture ("JV") of the Company, has been struck off and dissolved by the Registrar of Companies, Chennai, Tamilnadu, under section 248(5) of the Companies Act, 2013, consequently the investment of ''23.50 Cr. in TTPL has been written off and the provision of ''23.50 Cr. created during earlier years against this investment has now been reversed.

Note 29. Reconciliation of Tax Expense and the Accounting Profit multiplied by Corporate Income Tax Rate applicable for March 31, 2022 and March 31, 2021

The Company has exercised the option permitted under Section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019, in the earlier years. Accordingly, the Company has recognised Provision for Income Tax for the year and re-measured its Deferred tax liability basis the rate prescribed in the said section. Accordingly, Deferred Tax Liability have reduced by ''11.29 Cr. in the earlier years. The tax on the Company''s profit before tax differs from the theoretical amount that would arise on using the standard rate of corporation tax in India (25.168%) as follows:

Note 32. Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Company''s Standalone Financial Statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a. Judgements

In the process of applying the Company''s accounting policies, management has made the following judgement, which has significant effect on the amounts recognised in the Standalone Financial Statements.

i. Leases

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow.

Refer Note 39 for information on potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

b. Estimates and Assumptions

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

i. Impairment of Non-Financial assets including Investment in Subsidiaries

Impairment exists when the carrying value of an asset or cash generating unit, exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model.

ii. Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

iii. Revenue from Contract with Customers

The Company estimates variable considerations to be included in the transaction price for the sale of goods with rights of return and volume rebates. The Company''s expected volume rebates are analysed on a per customer basis for contracts that are subject to volume threshold. Determining whether a customer will be likely entitled to rebate will depend on the customer''s rebates entitlement and accumulated purchases to date.

iv. Allowances for slow / Non moving Inventory and obsolescence

An allowance for Inventory is recognised for cases where the realisable value is estimated to be lower than the inventory carrying value. The inventory allowance is estimated taking into account various factors, including prevailing sales prices of inventory item and losses associated with obsolete / slow-moving / redundant inventory items. The Company has, based on these assessments, made adequate provision in the books.

v. Employee Benefits

The cost of the defined benefit gratuity plan and other post-employment leave encashment benefit and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. In determining the appropriate discount rate, the management considers the interest rates of government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit obligations are given in Note 35.

vi. Fair Value Measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the

DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, Credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 41 for further disclosures.

Note 33. Standards issued but not yet effective

Ministry of Corporate affairs has issued Companies (Indian Accounting Standards) Amendment rules, 2022 on March 23, 2022, which contains various amendments to IndAS. Management has evaluated these and have concluded that there is no material impact on Company''s financial statement.

Note 34. Stock Options

On 16th March 2022 fresh grant of 2,85,400 options at ''1,471.90 under ESOP 2017 scheme was approved by the Nomination and Remuneration Committee of the Board of Directors of the Company.

With reference to the grants approved by the Nomination and Remuneration Committee of the Board of Directors of the Company, the Company has recognised expense amounting to ''0.58 Cr. (Previous Year - ''1.32 Cr.) for employees services received during the year, shown under Salaries, Wages and Bonus (Refer Note 23).

a. Gratuity

Under the Gratuity plan operated by the Company, every employee who has completed at least five years of service gets a Gratuity on leaving the organisation at 15 days on last drawn salary for each completed year of service as per Payment of Gratuity Act, 1972. The scheme is funded with an Insurance Company in the form of qualifying insurance policy. The following table summarizes the components of net benefit expense recognised in the Statement of profit and loss and the funded status and amounts recognised in the Balance Sheet.

i. The entire Plan Assets are invested in insurer managed funds with Life Insurance Corporation of India (LIC).

ii. The expected/actual return on Plan Assets is as furnished by LIC.

iii. The estimate of future salary increase takes into account inflation, likely increments, promotions and other relevant factors.

b. Provident Fund

The Company''s Provident Fund is exempted under Section 17 of the The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust (including any decrease in value of investments) and the notified interest rate. The exempt provident fund set up by the Company is a defined benefit plan under Ind AS 19 - Employee Benefits.

The Company has obtained the actuarial valuation of interest rate obligation in respect of provident fund and a net liablity of ''5.66 Cr. on re-measurement of the defined benefit plan was recognised in financial statements as at March 31, 2021. Since there is net asset position as at March 31, 2022, the same has not been recognised in the books.

d. Contributions to Defined Contribution Plans

During the year, the Company recognised ''5.70 Cr. (Previous Year - ''7.07 Cr.) to Provident Fund under Defined Contribution Plan, ''7.81 Cr. (Previous Year - ''6.04 Cr.) for Contributions to Superannuation Fund and ''0.60 Cr. (Previous Year - ''0.69 Cr.) for Contributions to Employee State Insurance Scheme and ''0.20 Cr. (Previous Year -''0.13 Cr.) to Contribution to National Pension Scheme in the Statement of Profit and Loss.

Note 36a. Contingent Liabilities Note i

a) Matters wherein management has concluded the Company''s liability to be probable have accordingly been provided for in the books. Also Refer Note 16.

b) Matters wherein management has concluded the Company''s liability to be possible have accordingly been disclosed under Note 36a ii Contingent liabilities below.

c) Matters wherein management is confident of succeeding in these litigations and have concluded the Company''s liability to be remote. This based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process.

Note ii: Contingent Liabilities

'' in Crores

Particulars

As at

As at

31-Mar-2022

31-Mar-2021

(i)

Disputed Income-Tax demands under appeal / remand pending before various appellate/ assessing authorities against the Demerged Company (including interest and penalty)

-

7.05

(ii)

Disputed Service Tax, Excise and Customs duty demand pertaining to financial years 2001-02 to 2002-2003 under appeal pending before the Appellate Tribunal. The Management is of the opinion that the above demands are arbitrary and are not sustainable

0.11

0.11

(iii)

Claims against the Company not acknowledged as debts

0.69

1.21

(iv)

Amounts payable to employees with respect to retrospective applicability of amendments to the Payment of Bonus Act, 1965 in respect of FY 2014-15, pending at High Court under a writ petition. The Management is of the opinion that the above retrospective amendment is not sustainable

2.61

2.61

(v)

Corporate Guarantee (Refer Note d)

-

617.50

(a) Draft Assessment Orders received from IT Authorities and Show Cause Notices received from various other government authorities, pending adjudication, have been assessed by the management and considered appropriately in the standalone financial statements.

(b) The uncertainties and possible reimbursement in respect of the above mentioned contingent liabilities are dependent on the outcome of various legal proceedings and therefore, cannot be predicted accurately.

(c) The Company considers the Cash flow in each of the cases to be uncertain and hence considered as Contingent Liabilities.

(d) The Corporate Guarantee facility provided by the Company for an amount not exceeding ''1,365 Cr. to the lenders of CG Power and Industrial Solutions Limited (CGPISL) in connection with the rupee term loan and fund based working capital limits, were closed in the current year resulting in the termination of such guarantee given. The lenders have confirmed the release and cancellation of the Corporate Guarantee as at March 31, 2022.

Terms and Conditions of transaction with Related Parties

The sale to and purchases from Related Parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in Cash. For the year ended March 31, 2022, the Company has not recorded any impairment of receivables relating to amounts owed by Related Parties.

Note 38. Segment Information

Effective 1st April 2021, the Company has re-organised certain business units and its operating structure and in view of the structural changes, the Chief Operating Decision Maker (CODM) reviews the business as three primary segments - "Engineering", "Metal Formed Products" and "Mobility", and in accordance with the core principles of IND AS 108 - ''Operating Segments'', these have been considered as the reportable segments of the Company.

The Management Committee headed by Managing Director (CODM) consisting of Chief financial officer, Leaders of Strategic Business Units and Human resources have identified the above three reportable operating segments. It reviews and monitors the operating results of the operating segments for the purpose of making decisions about resource allocation and performance assessment using profit or loss and return on capital employed.

The Engineering segment comprises of cold rolled steel strips and precision steel tube viz., Cold Drawn Welded tubes (CDW) and Electric Resistance Welded tubes (ERW). The Metal Formed Products segment comprises of Automotive chains, fine blanked products, stamped products, roll-formed car doorframes and cold rolled formed sections for railway wagons and passenger coaches. The Mobility segment comprises of Standard bi-cycles, Special bi-cycles including alloy bikes and Speciality performance bikes and fitness equipment and 3-wheeler electric vehicle. The Industrial chains and new business namely, Optic Lens, TMT Bars, Truck Body Building and TI Machine building are reported as Others for the purpose of segment reporting. The Company has re-presented the information relating to previous year in line with the revised segment classification.

Segment assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment. Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

Transfer prices between operating segments are on an arm''s length basis in a manner similar to transactions with third parties.

Note 39. Leases

The Company has lease contracts for Land and Building used for the purpose of Warehouses and Factories. Leases of such assets generally have lease terms between 2 and 95 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain certain financial ratios. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

The Company also has certain leases of machinery with lease terms of 12 months or less. The Company applies the ''shortterm lease'' recognition exemptions for these leases.

The carrying amounts of right-of-use assets recognised and the movements during the period is explained in Note 4b.

Set out below are the carrying amounts of lease liabilities included under financial liabilities and the movements during the period:

The Company had total cash outflows for leases of ''10.95 Cr. in March 31, 2022 (Previous Year ''10.74 Cr.). The Company also had non-cash additions to right-of-use assets and lease liabilities of ''1.72 Cr. during the year (Previous Year ''6.12 Cr.). There are no future cash outflows relating to leases that have not yet commenced.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised (Refer Note 32).

The Company does not expect to terminate / extend any lease as at March 31, 2022. There were no termination / extension of any lease for the year ended March 31, 2021.

The management assessed that cash and cash equivalents, trade receivables, loans, current investments, other financial assets, short term borrowings, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

ii. The fair values of certain unquoted equity investments have been estimated using Discounted Cash-flow Model (DCF). The valuation is based on certain assumptions like forecast cash-flows, discount rate, etc.

iii. The fair value of borrowings is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return, adjusted for the Credit spread considered by the lenders for instruments of the similar maturity.

iv. Derivatives are fair valued using market observable rates and published prices.

The Company''s principal financial liabilities, other than derivatives, comprise of borrowings and trade payables. The main purpose of these financial liabilities is to raise finance for the Company''s operations. The Company has various financial assets such as trade receivables, cash and short-term deposits, which arise directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken

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 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.

i Foreign Currency Exchange Rate Risk

The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective Company.

The Company, as per its forex policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its forex policy.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 5%.

Foreign Currency Sensitivity

The following tables demonstrate the sensitivity to 5% appreciation in USD and EUR exchange rates on foreign currency exposures as at the year end, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company''s exposure to foreign currency changes for all other currencies is not material

Conversely, 5% depreciation in the USD and EUR rates against the significant foreign currencies as at March 31, 2022 and March 31, 2021 would have had the same but opposite effect, again holding all other variables constant.

ii Equity Price Risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The majority of the Company''s investments are in the shares of group companies, which are carried at cost. The Company has investments in other equity investments, of only ''8.52 Cr. as at March 31, 2022. (Previous Year ''8.41 Cr.).

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 trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.

Exposure to Credit risk - The carrying amount of financial assets represents the maximum Credit exposure. The maximum exposure to Credit risk was ''1,151.10 Cr. as at March 31, 2022 and ''942.97 Cr. as at March 31, 2021, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, derivative instruments, mutual fund investments and other financial assets excluding equity investments.

Credit risk from balances with banks and investment of surplus funds in mutual funds is managed by the Company''s treasury department. The objective is to minimise the concentration of risks and therefore mitigate financial loss.

Of the above, ''172.02 Cr. (Previous year ''73.56 Cr.) is backed by Export Credit Guarantee Cover / Letter of Credit as at March 31, 2022.

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. Furthermore, the Company has access to funds from debt markets through commercial paper, non-convertible debentures, and other debt instruments. 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 risks. The Company also invests 15% of the non-convertible debentures (taken by the Company) falling due for repayment in the next 12 months in bank deposits and mutual funds, to meet the regulatory norms of liquidity requirements.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

As at March 31, 2022, the Company has undrawn committed lines of ''227.96 Cr. (Previous Year ''317.97 Cr.)

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 internal accruals, non-convertible debentures, external commercial borrowings 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 capital employed using a Debt equity ratio, which is total debt divided by total equity and maturity profile of the overall debt portfolio of the Company.

There have been no breaches in the financial covenants of any interest-bearing loans and borrowings in the current period. The following table summarizes the capital of the Company:

Note 46. Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iii) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

(iv) During the year, the Company has incorporated a wholly owned subsidiary viz., TI Clean Mobility Private Limited ("TICMPL") to pursue and engage in Clean Mobility business interests and electric three-wheeler business with an equity investment of ''100 Cr. Further the Company has provided an intercorporate deposit of ''64 Cr. to TICMPL. Subsequently, TICMPL acquired 69.95% of the subscribed and paid up share capital of M/s. Cellestial E-Mobility Private Limited, a Company engaged in design and manufacture of electric tractors, aviation ground support electric equipment and other electric machinery by purchasing 1,41,677 equity shares of the face value of ''10/- each.

(v) The Company has not received any fund from any person or entity, including foreign entities (Funding Parties) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vi) The Company has not made any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,1961 (such as search or survey or any other relevant provision of the Income Tax Act. 1961).

Note 47. Previous Year''s figures

The Company has reclassified / regrouped previous year figures to conform to this year''s classification.


Mar 31, 2021

The Company pursuant to the Securities Subscription Agreement entered with M/s CG Power and Industrial Solutions Limited ("CG Power") invested ''587.50 Crores. on 26th November 2020 towards allotment of 64,25,23,365 equity shares at ''8.56 per equity share (including premium) and upfront consideration of 25% against allotment of 17,52,33,645 warrants convertible into equal number of equity shares within 18 months, upon payment of balance 75% consideration. The Company further invested ''100 Crores. on 19th December 2020 for allotment of 6,87,28,522 equity shares of CG Power at ''14.55 per equity share (including premium), taking the equity holding of the Company to 53.16%. The Company holds 58.58% on fully diluted basis (i.e. assuming conversion of all the warrants into equity shares) in CG Power. ''3.56 Crores of transaction cost incurred which are directly attributable to this acquisition has been capitalised with the cost of investment.

During the previous year, the Company tendered 49 lakh shares in the Buyback Scheme announced by Shanthi Gears Limited to all its eligible shareholders at a consideration of ''140/- per share, of which, 32.39 lakh equity shares were accepted on a proportionate basis by Shanthi Gears Limited. The Company received a consideration of ''45.35 Crores against the cost of investment of ''26.24 Crores with the difference of ''19.11 Crores recognised as profit in the standalone financial statements.

Consequent to discontinuance of TI Tsubamex Private Limited ("TTPL") operations, sale of its assets and settling of its liabilities, the Company made an application to the Registrar of Companies, Chennai (ROC) for striking off TTPL''s name from the Register of Companies. The final approval from ROC is awaited.

Terms / Rights attached to class of shares

The Company has only one class of shares referred to as Equity Shares having a par value of ''1 each. The holders of Equity Shares are entitled to one vote per share. Dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting. Repayment of capital will be in proportion to the number of equity shares held by the shareholders.

Status on Global Depository Receipts (GDRs)

The aggregate number of GDRs deemed to be outstanding as at 31st March 2021 is 9,300 (As at 31st March 2020 -9,300) each representing one Equity Share of ''1 face value. GDR % against total number of shares is 0.005% (Previous Year - 0.005%). The GDRs carry the same terms/rights attached to Equity Shares of the Company. The aforesaid GDR''s are not listed in any Stock Exchanges.

General Reserve - Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013. Additions to the general reserve during the current year and previous year are on account of cancellation of share options post vesting period.

Securities Premium - The Securities premium received during the year represents the premium received towards allotment of 49,41,442 shares. This balance will be utilised in accordance with the provisions of Section 52 of the Companies Act 2013 towards issuance of fully paid bonus shares, write-off of preliminary expenses, commission / discount expenses on issue of shares / debentures, premium payable on redemption of redeemable preference shares / debentures and buyback of its own shares / securities under Section 68 of the Companies Act 2013.

The preparation of the Company''s Standalone Financial Statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a. Judgements

In the process of applying the Company''s accounting policies, management has not made any judgement, which has significant effect on the amounts recognised in the Standalone Financial Statements.

b. Estimates and Assumptions

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

i. Impairment of Non-Financial Assets including Investment in Subsidiaries

Impairment exists when the carrying value of an asset or cash generating unit, exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal

calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Revenue from Contract with Customers

The Company estimates variable considerations to be included in the transaction price for the sale of goods with rights of return and volume rebates. The Company''s expected volume rebates are analysed on a per customer basis for contracts that are subject to volume threshold. Determining whether a customer will be likely entitled to rebate will depend on the customer''s rebates entitlement and accumulated purchases to date.

Allowances for slow / Non moving Inventory and obsolescence

An allowance for Inventory is recognised for cases where the realisable value is estimated to be lower than the inventory carrying value. The inventory allowance is estimated taking into account various factors, including prevailing sales prices of inventory item and losses associated with obsolete / slow-moving / redundant inventory items. The Company has, based on these assessments, made adequate provision in the books.

Employee Benefits

The cost of the defined benefit gratuity plan and other post-employment leave encashment benefit and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. In determining the appropriate discount rate, the management considers the interest rates of government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit obligations are given in Note 35.

Fair Value Measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, Credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 41 for further disclosures.

i. LeasesDetermining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow.

Refer Note 39 for information on potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

Note 33. Standards issued but not yet effective

There were no Standards issued but not effective as at 31st March 2021.

Note 34. Stock Options

During the year, no fresh grant was approved by the Nomination and Remuneration Committee of the Board of Directors of the Company.

With reference to the grant approved by the Nomination and Remuneration Committee of the Board of Directors of the Company on 24th July 2019, the Company has recognised expense amounting to ''1.32 Crores (Previous Year - ''3.06 Crores) for employees services received during the year, shown under Salaries, Wages and Bonus (Refer Note 23).

i. The entire Plan Assets are invested in insurer managed funds with Life Insurance Corporation of India (LIC).

ii. The expected/actual return on Plan Assets is as furnished by LIC.

iii. The estimate of future salary increase takes into account inflation, likely increments, promotions and other relevant factors.

b. Provident Fund

The Company''s Provident Fund is exempted under Section 17 of the The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust (including any decrease in value of investments) and the notified interest rate. The exempt provident fund set up by the company is a defined benefit plan under Ind AS 19 - Employee Benefits.

The Company has obtained the actuarial valuation of interest rate obligation in respect of provident fund and a loss of ''5.66 Crores (31st March 2020 ''4.35 Crores) on re-measurement of the defined benefit plan is recognised in financial statements.

The Company has provided ''0.04 Crores (31st March 2020 ''3.29 Crores) being the change in re-measurement of the defined benefit plans, in other comprehensive income towards probable incremental employee benefit liability that may arise on the Company on account of any likely shortfall of the Trust in meeting its obligations.

d. Contributions to Defined Contribution Plans

During the year, the Company recognised ''6.96 Crores (Previous Year - ''7.21 Crores) to Provident Fund under Defined Contribution Plan, ''6.04 Crores (Previous Year - ''6.30 Crores) for Contributions to Superannuation Fund and ''0.69 Crores (Previous Year - ''1.02 Crores) for Contributions to Employee State Insurance Scheme in the Statement of Profit and Loss.

Note 36a. Contingent LiabilitiesNote i

a) Matters wherein management has concluded the Company''s liability to be probable have accordingly been provided for in the books. Also refer note 16.

b) Matters wherein management has concluded the Company''s liability to be possible have accordingly been disclosed under Note 36a (ii) Contingent liabilities below.

c) Matters wherein management is confident of succeeding in these litigations and have concluded the Company''s liability to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process.

(a) Draft Assessment Orders received from IT Authorities and Show Cause Notices received from various other government authorities, pending adjudication, have been assessed by the management and considered appropriately in the financial statements.

(b) The uncertainties and possible reimbursement in respect of the above mentioned contingent liabilities are dependent on the outcome of various legal proceedings and therefore, cannot be predicted accurately.

(c) The Company considers the Cash flow in each of the cases to be uncertain and hence considered as Contingent Liabilities.

(d) The Company has given Corporate Guarantee to the lenders of CG Power and Solutions Limited (CGPISL) in connection with the rupee term loan and fund based working capital limits sanctioned to CGPISL for an amount not exceeding ''1,365 Crores pursuant to the shareholders'' approval obtained by the Company under the provisions of Section 186 of the Companies Act, 2013. As at 31st March 2021, CGPISL has utilised ''617.50 Crores.

For management purposes, the Company''s operations are organised into three major segments - Cycles and Accessories, Engineering and Metal Formed Products.

The Management Committee headed by Managing Director (CODM) consisting of Chief financial officer, Leaders of Strategic Business Units and Human resources have identified the above three reportable operating segments. It reviews and monitors the operating results of the operating segments for the purpose of making decisions about resource allocation and performance assessment using profit or loss and return on capital employed.

The Cycles and Accessories segment comprises of Standard bi-cycles, Special bi-cycles including alloy bikes and Speciality performance bikes and fitness equipments. The Engineering segment comprises of cold rolled steel strips and precision steel tube viz., Cold Drawn Welded tubes (CDW) and Electric Resistance Welded tubes (ERW). The Metal Formed Products segment comprises of Automotive and Industrial chains, fine blanked products, stamped products, roll-formed car doorframes and cold rolled formed sections for railway wagons and passenger coaches.

Segment assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment. Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

Transfer prices between operating segments are on an arm''s length basis in a manner similar to transactions with third parties.

The Company has lease contracts for Land and Building used for the purpose of Warehouses and Factories. Leases of such assets generally have lease terms between 2 and 95 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets and some contracts require the Company to maintain certain financial ratios. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

The Company also has certain leases of machinery with lease terms of 12 months or less. The Company applies the ''short-term lease'' recognition exemptions for these leases.

The carrying amounts of right-of-use assets recognised and the movements during the period is explained in Note No.4b

Set out below are the carrying amounts of lease liabilities included under financial liabilities and the movements during the period:

The Company had total cash outflows for leases of ''10.74 Crores in 31st March 2021 (''14.62 Crores during the year ended 31st March 2020). The Company also had non-cash additions to right-of-use assets and lease liabilities of ''6.12 Crores during the year (''46.18 Crores during the year ended 31st March 2020). There are no future cash outflows relating to leases that have not yet commenced.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised (see Note 32).

Set out below are the undiscounted potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term:

The management assessed that cash and cash equivalents, trade receivables, loans, current investments, other financial assets, short term borrowings, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

ii. The fair values of certain unquoted equity investments have been estimated using Discounted Cash-flow Model (DCF). The valuation is based on certain assumptions like forecast cash-flows, discount rate, etc.

iii. The fair value of borrowings is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return, adjusted for the Credit spread considered by the lenders for instruments of the similar maturity.

iv. Derivatives are fair valued using market observable rates and published prices.

The Company''s principal financial liabilities, other than derivatives, comprise of borrowings and trade payables. The main purpose of these financial liabilities is to raise finance for the Company''s operations. The Company has various financial assets such as trade receivables, cash and short-term deposits, which arise directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken

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 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 i Foreign Currency Exchange Rate Risk

The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective Company.

The Company, as per its forex policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its forex policy

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 5%.

Foreign Currency Sensitivity

The following tables demonstrate the sensitivity to 5% appreciation in USD and EURO exchange rates on foreign currency exposures as at the year end, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company''s exposure to foreign currency changes for all other currencies is not material

Equity Price Risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The majority of the Company''s investments are in the shares of group companies, which are carried at cost. The Company has investments in other equity investments, of only ''8.41 Crores as at 31st March 2021. (As at 31st March 2020 - ''8.92 Crores).

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 trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.

Exposure to Credit risk - The carrying amount of financial assets represents the maximum Credit exposure. The maximum exposure to Credit risk was ''963.59 Crores as at 31st March 2021 and ''601.83 Crores as at 31st March 2020, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, derivative instruments, mutual fund investments and other financial assets excluding equity investments.

As at 31st March 2021, the company had 152 customers (as at 31st March 2020 - 110 customers) that owed the Company more than ''1 Crore each and accounted for approximately 99% (as at 31st March 2020 - 99%) of the total trade receivables outstanding. There were 12 customers (as at 31st March 2020 - 9 Customers) with balances greater than ''10 Crores accounting for around 31% of the trade receivables (Previous year - 31%).

Credit risk from balances with banks and investment of surplus funds in mutual funds is managed by the Company''s treasury department. The objective is to minimise the concentration of risks and therefore mitigate financial loss.

Of the above, ''73.56 Crores (Previous year - ''70.88 Crores) is backed by Export Credit Guarantee Cover / Letter of Credit as at 31st March 2021.

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. Furthermore, the Company has access to funds from debt markets through commercial paper, non-convertible debentures, and other debt instruments. 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 risks. The Company also invests 15% of the non-convertible debentures (taken by the Company) falling due for repayment in the next 12 months in bank deposits, to meet the regulatory norms of liquidity requirements.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

As at 31st March 2021, the Company has undrawn committed lines of ''317.97 Crores (As at 31st March 2020 -''359.07 Crores)

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 internal accruals, nonconvertible debentures, external commercial borrowings 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 capital employed using a Debt equity ratio, which is total debt divided by total equity and maturity profile of the overall debt portfolio of the Company.

The Company has reclassified / regrouped previous year figures to conform to this year''s classification.


Mar 31, 2019

Notes:

a. During the year, the Company has divested its entire shareholding of 1,37,50,000 shares of Rs,10/- each in the joint venture company , TI Absolute Concepts Private Ltd. (TIABS) in favour of the joint venture partner, Absolute Specialty Foods Chennai Private Ltd.

Notes:

a. Investments at fair value through OCI reflect investment in quoted and unquoted equity investments. Refer Note 41.1 for determination of their fair value

b. During the year, the Company has sold the entire investments held in LG Balakrishnan & Bros. Limited, LGB Forge Limited and GIC Housing Finance Limited. These investments are classified as FVTOCI and consequently the gain on sale has been transferred to retained earnings. The fair value of the investments on the date of derecognition is Rs,1.71 Cr. and cumulative gain is Rs,1.47 Cr.

c. During the year, the Company subscribed to 1,50,663 Equity Shares of face value of Rs,10 each of Watsun Infrabuild Private Limited at face value, amounting to Rs,0.15 Cr.

Trade Receivables are non-interest bearing and are generally have Credit period to a maximum of 120 days. For terms and conditions relating to Related Party receivables, refer Note 37. There are no debts due by directors or other officers of the company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any director is a partner or a director or a member.

As at 31st March 2019, the Company had undrawn committed borrowing facilities of Rs,211.87 Cr. (31st March 2018 - Rs,296.14 Cr.).

There are restrictions on the bank balances held in unpaid dividend accounts.

The Company has applied amendments to Indian Accounting Standard 7 "Statement of Cash Flows", which is effective for annual periods beginning on or after 1st April 2017. The amendments require the Company to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from Cash Flows and non-cash changes (such as fair value changes). The changes in liabilities arising from financial activities are only on account of changes in the Cash Flows.

Note 9f - During the year, the Company has invested an aggregate amount of Rs,724.00 Cr. (Previous Year - Rs,1198.10 Cr.) in the units of various Cash Management Schemes of Mutual funds, for the purpose of deployment of temporary cash surplus and has Nil (Previous Year - Nil) in various schemes of mutual funds as at year end. The total consideration received on the sale of units during the year was Rs,725.89 Cr. (Previous Year - Rs,1302.21 Cr.)

b) Terms/Rights attached to class of shares

The Company has only one class of shares referred to as Equity Shares having a par value of Rs,1 each. The holders of Equity Shares are entitled to one vote per share. Dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. Repayment of capital will be in proportion to the number of Equity Shares held by the shareholders.

d) Status on Global Depository Receipts (GDRs)

The aggregate number of GDRs deemed to be outstanding as at 31st March 2019 is 22,30,630 (As at 31st March 2018 - 42,30,630) each representing one Equity Share of Rs,1 face value. GDR % against total number of shares is 1.19% (Previous Year -2.26%). The GDRs carry the same terms/rights attached to Equity Shares of the Company.

a. General Reserve - Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilized only in accordance with the specific requirements of Companies Act, 2013.

b. Securities Premium - The Securities premium received during the year represents the premium received towards allotment of 1,74,913 shares. This balance will be utilized in accordance with the provisions of Section 52 of the Companies Act 2013 towards issuance of fully paid bonus shares, write-off of preliminary expenses, commission / discount expenses on issue of shares / debentures, premium payable on redemption of redeemable preference shares / debentures and buy back of its own shares / securities under Section 68 of the Companies Act 2013.

c. Retained Earnings - The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the financial statements of the Company and also considering the requirements of the Companies Act, 2013. Thus, the amounts reported above may not be distributable in entirety.

d. Share Option Outstanding Account - Under Ind AS 102, fair value of the options granted is to be expensed out over the life of the vesting period as employee compensation costs reflecting period of receipt of service. Stock options granted but not vested as on the transition date were valued for expired period, calculated from the grant date till date of transition, and were credited to Share options outstanding account.

e. Cash Flow Hedge Reserve - The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognized and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged item.

f. FVTOCI Reserve - This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through Other Comprehensive Income.

g. Capital Reserve - The amount represents equity Share Capital of the Company amounting to Rs,0.11 Cr., cancelled pursuant to the Scheme of arrangement (Refer Note 1) and credited to capital reserve.

h. Treasury Shares - Pursuant to the scheme of arrangement (Refer Note 1), the trust currently holds 7,03,680 shares each of both the Company and the Demerged Company (Cholamandalam Financial Holdings Limited, earlier known as TI Financial Holdings Limited) at a cost of Rs,0.25 Cr as at 31st March 2019. These shares are treated as treasury shares in the standalone financial statements. The market value of these shares as on 31st March 2019 was approximately ''61 Cr. In view of the requirements of SEBI (Share Based Employee Benefits) Regulations, 2014, these shares have to be disposed within 5 years from the date of these regulations (i.e. before 28th October 2019). The gain/loss on sale of these treasury shares will be recognized in equity by the Company in accordance with Ind AS 32.

i. Debenture Redemption Reserve (DRR) - The Companies (Share Capital and Debentures) Rules, 2014 (as amended), require the company to create DRR out of profits of the company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures outstanding. Accordingly, the Company has created DRR equal to 25% of the outstanding debentures.

In Previous year, Sale of Products includes Excise Duty collected from customers of Rs,74.57 Cr.

In Previous year, Sale of Products net of Excise Duty is Rs,4,335.10 Cr.

In Previous year, Sale of Scrap includes Excise Duty collected from Customers of ''8.81 Cr.

In Previous year, Sale of Scrap net of Excise Duty is Rs,224.19 Cr.

Revenue from operations for periods up to 30th June 2017 includes excise duty. From 151 July 2017 onwards the excise duty and most indirect taxes in India have been replaced by Goods and Service Tax (GST). The Company collects GST on behalf of the Government. Hence, GST is not included in Revenue from operations. In view of the aforesaid change in indirect taxes, Revenue from operations year ended 31st March 2019 is not comparable to 31st March 2018.

Contract assets and Contract liabilities are deferred revenue and deferred cost on amortization of tooling revenue and tooling cost, amortized over the life of the tool.

Note - The Company has adopted modified retrospective approach with respect to Ind AS 115 and effect of Ind AS 115 are given by adjusting the opening retained earnings. The Contract liability and Contract Asset balances amounting to Rs,7.88 Cr. and Rs,7.39 Cr. has been accounted as at 1st April 2018.

Of the total contract liabilities at the beginning of the year, the company has recognized revenue in the current year amounting to Rs,3.53 Cr.

a. During the current year, considering the market factors, changes in future project potential and accumulated losses, the company has recognized an impairment loss of around Rs,12.00 Cr. (Previous Year - Rs,25.25 Cr.), in respect of investment made in Joint Venture.

b. During the year, the Company has divested its entire shareholding of 1,37,50,000 shares of Rs,10/- each in the joint venture company, TI Absolute Concepts Private Ltd. (TIABS) in favour of the joint venture partner, Absolute Specialty Foods Chennai Private Ltd., for an aggregate consideration of Rs,3.00 Cr., against the cost of Rs,13.75 Cr. and has exited the joint venture. In the previous year, the Company has provided impairment for Rs,13.75 Cr. Accordingly there is a reversal of impairment provision aggregating to Rs,13.75 Cr. and loss on sale of investment aggregating to Rs,10.75 Cr.

Note 1. Income Tax Expense

The major components of income tax expense for the years ended 31st March 2019 and 31st March 2018 are:

* The weighted average number of shares takes into account the effect of Treasury shares held through Employee welfare trust in the current year.

Note 2. Significant Accounting Judgments, Estimates and Assumptions

The preparation of the Company''s Standalone Financial Statements requires management to make judgments’, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a. Judgments

In the process of applying the Company''s accounting policies, management has not made any judgment, which has significant effect on the amounts recognized in the Standalone Financial Statements.

b. Estimates and Assumptions

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

i. Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model.

ii. Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

iii. Revenue from Contract with Customers

The Company estimates variable considerations to be included in the transaction price for the sale of goods with rights of return and volume rebates. The Company''s expected volume rebates are analysed on a per customer basis for contracts that are subject to volume threshold. Determining whether a customer will be likely entitled to rebate will depend on the customer''s rebates entitlement and accumulated purchases to date.

iv. Allowances for slow / Non moving Inventory and obsolescence

An allowance for Inventory is recognized for cases where the realizable value is estimated to be lower than the inventory carrying value. The inventory allowance is estimated taking into account various factors, including prevailing sales prices of inventory item and losses associated with obsolete / slow-moving / redundant inventory items. The Company has, based on these assessments, made adequate provision in the books.

v. Employee Benefits

The cost of the defined benefit gratuity plan and other post-employment leave encashment benefit and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit obligations are given in Note 35.

vi. Fair Value Measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, Credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 41 for further disclosures.

Note 3. Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

Ind AS 116 - Leases

Ind AS 116 Leases was notified by MCA on 30th March 2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 1st April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of ''low-value'' assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognize a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be also required to premeasured the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognize the amount of the re-measurement of the lease liability as an adjustment to the right-of-use asset.

Less or accounting under Ind AS 116 is substantially unchanged from today''s accounting under Ind AS 17. Lessors will continue to classify all leases using the same classification principle as in Ind AS 17 and distinguish between two types of leases: operating and finance leases. The Company intends to adopt these standards from 1st April 2019. The Company has established an implementation team to implement Ind AS 116 and it continues to evaluate the changes to accounting systems and processes, and additional disclosure requirements that may be necessary. A reliable estimate of the quantitative impact of Ind AS 116 on financial statements will only be possible once the implementation project has been completed.

Ind AS 12 - Uncertain Tax Positions

Appendix C in Ind AS 12 is effective from 1st April 2019 and it set out the principles on recognition and measurement principle when there is uncertainty over income tax treatments. An entity shall evaluate whether it is probable that the tax authority shall accept an uncertain tax treatment. If it is probable, the tax base shall be consistent with that of the items used in its income tax filings. If not probable, the company shall reflect the effect of uncertainty by using either the most likely amount method or expected value method. If the uncertain tax treatment affects current and deferred tax, the entity shall make consistent judgment and estimates for current and deferred tax.

The interpretation is effective for annual reporting periods beginning on or after 1st April 2019, but certain transition reliefs are available. The Company will apply the interpretation from its effective date. The company is in the process of evaluating the changes and reliable estimate of the quantitative impact will be possible on completion of the study.

Ind AS 19 - Employee Benefits

Ind AS 19 has been amended to factor the impact relating to benefits offered under the plan and the plan assets after the plan amendment, curtailment or settlement in determining the past service cost, current service cost and net interest cost or income. The amendments apply to plan amendments, curtailments, or settlements occurring on or after the beginning of the first annual reporting period that begins on or after 1st April 2019. These amendments will apply only to any future plan amendments, curtailments, or settlements of the Company.

Ind AS 28 - Investments in Associates and Joint Ventures

The amendment states that Ind AS 109 applies to other financial instruments in an associate or joint venture to which the equity method is not applied for long term interest that form part of entity''s net investment in an associate or joint venture.

These amendments shall be made retrospectively in accordance with Ind AS 8 for annual periods beginning from 1st April 2019. These amendments are not applicable to the Company.

Ind AS 109 - Prepayment Features with Negative Compensation

Under Ind AS 109, a debt instrument can be measured at amortized cost or at fair value through other comprehensive income, provided that the contractual cash flows are ''solely payments of principal and interest on the principal amount outstanding'' (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to Ind AS 109 clarify that a financial asset passes the SPPI criterion regardless of the event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract

The amendments should be applied retrospectively and are effective for annual periods beginning on or after 1st April 2019. These amendments have no impact on the Standalone financial statements of the Company.

Ind AS 103 - Party to a Joint Arrangements obtains control of a business that is a Joint Operation

The amendments clarify that, when an party to a joint arrangement obtains control of a business that is a joint operation, it applies the requirements for a business combination achieved in stages, including remeasuring previously held interests in the assets and liabilities of the joint operation at fair value. In doing so, the acquirer remeasures its entire previously held interest in the joint operation.

An entity applies those amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1st April 2019. These amendments are currently not applicable to the Company but may apply to future transactions.

Ind AS 111 - Joint Arrangements

A party that participates in, but does not have joint control of, a joint operation might obtain joint control of the joint operation in which the activity of the joint operation constitutes a business as defined in Ind AS 103. The amendments clarify that the previously held interests in that joint operation are not remeasured.

An entity applies those amendments to transactions in which it obtains joint control on or after the beginning of the first annual reporting period beginning on or after 1st April 2019. These amendments are currently not applicable to the Company but may apply to future transactions.

Ind AS 12 - Income Taxes

The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognizes the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events. An entity applies those amendments for annual reporting periods beginning on or after 1st April 2019. Since the Company''s current practice is in line with these amendments, the Company does not expect any effect on its standalone financial statements.

Note 4. Stock Options

During the year, the Nomination and Remuneration Committee of the Board of Directors of the Company, at its meeting held on 27th March 2019, approved the grant of 10,122 Stock Options and 52,440 Stock Options to eligible employees of the Company.

In this regard, the Company has recognized expense amounting to Rs,4.93 Cr. (Previous Year - Rs,5.29 Cr.) for employees services received during the year, shown under Salaries, Wages and Bonus (Refer Note 23).

Note 5. Employee Benefits Obligation Defined Benefit Plan

a. Gratuity

Under the Gratuity plan operated by the Company, every employee who has completed at least five years of service gets a Gratuity on departure at 15 days on last drawn salary for each completed year of service as per Payment of Gratuity Act, 1972. The scheme is funded with an Insurance Company in the form of qualifying insurance policy. The following table summarizes the components of net benefit expense recognized in the Statement of profit and loss and the funded status and amounts recognized in the Balance Sheet.

Notes:

i The entire Plan Assets are invested in insurer managed funds with Life Insurance Corporation of India (LIC).

ii The expected/actual return on Plan Assets is as furnished by LIC.

iii The estimate of future salary increase takes into account inflation, likely increments, promotions and other relevant factors.

b. Provident Fund

The Company''s Provident Fund is exempted under Section 17 of the The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. Conditions for the grant of exemption stipulate that the employer shall make good the deficiency, if any, in the interest rate declared by the Trust over the statutory limit. The Actuary has provided a valuation for Provident Fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions provided below and the Company does not have additional obligation as at 31st March 2019.

During the year, the Company contributed Rs,6.76 Cr. (Previous year - Rs,6.95 Cr) under Defined Benefit Plans and the same has been recognized in the Statement of Profit and Loss under Employee Benefits expense.

d. Contributions to Defined Contribution Plans

During the year, the Company recognized Rs,5.05 Cr. (Previous Year - Rs,5.19 Cr.) to Provident Fund under Defined Contribution Plan, Rs,6.40 Cr. (Previous Year - Rs,6.34 Cr.) for Contributions to Superannuation Fund and Rs,1.52 Cr. (Previous Year - Rs,1.47 Cr.) for Contributions to Employee State Insurance Scheme in the Statement of Profit and Loss.

(a) Draft Assessment Order received from Income Tax Authorities and show cause notices received from various other Government Authorities, pending adjudications, have been considered as contingent liability based on management assessment.

(b) The uncertainties and possible reimbursement in respect of the above mentioned contingent liabilities are dependent on the outcome of various legal proceedings and therefore, cannot be predicted accurately.

(c) The Company considers the Cash flow in each of the cases to be uncertain and hence considered as Contingent Liabilities.

Note 6

The Supreme Court had passed judgment on 28th February 2019 that all allowances paid to employees are to be considered for the purposes of PF wage determination. There are numerous interpretative issues relating to the above judgment. As a matter of caution, the company has made a provision on a prospective basis from the date of the SC order. The company will update its provision, on receiving further clarity on the subject.

Note 37. Disclosure in respect of Related Parties pursuant to Ind AS 24 a) List of Related Parties

I. Subsidiary Companies

a. Shanthi Gears Limited

b. Financiere C10 SAS and its Subsidiaries namely

i. Sedis SAS

ii. Sedis Company Limited

iii. Sedis Gmbh

c. Great Cycles (Private) Limited

d. Creative Cycles (Private) Limited

II. Joint Venture Company

a. TI Tsubamex Private Limited

b. TI Absolute Concepts Private Limited (till 4th June 2018)

III. Company having Significant Influence

a. Ambadi Investments Limited

b. Parry Agro Industries Limited

c. Parry Enterprises India Limited

IV. Key Management Personnel (KMP)

a. Mr Vellayan Subbiah - Managing Director w.e.f 14th August 2018 (Managing Director Designate till 13th August 2018)

b. Mr L Ramkumar - Managing Director (Till 13th August 2018)

c. Mr S Suresh - Company Secretary

d. Mr K Mahendra Kumar - Chief Financial Officer

V. Non Executive Directors

a. Mr M M Murugappan, Chairman

b. Mr Hemanth M Nerurkar (Till 13th August 2018)

c. Mr Pradeep V Bhide

d. Mr S Sandilya (Till 13th August 2018)

e. Ms Madhu Dubhashi

f. Mr Ramesh K B Menon

g. Mr Sanjay Johri (from 14th August 2018)

h. Mr Mahesh Chhabria (from 5th February 2019)

VI. Post Employment Benefit Plans

a. T.I.I.(Subsidiaries) Employees Provident Fund

b. TI Employees Provident Fund India Ltd

c. Tube Products Of India Employees Provident Fund

d. Tube Investments of India Limited, Senior Officer, Superannuation Fund

Note 7. Segment Information

For management purposes, the Company''s operations are organized into three major segments - Cycles and Accessories, Engineering and Metal Formed Products.

The Management Committee headed by Managing Director (CODM) consisting of Chief financial officer, Leaders of Strategic Business Units and Fluman resources have identified the above three reportable operating segments. It reviews and monitors the operating results of the operating segments for the purpose of making decisions about resource allocation and performance assessment using profit or loss and return on capital employed.

The Cycles and Accessories segment comprises of Standard bi-cycles, Special bi-cycles including alloy bikes and Speciality performance bikes and fitness equipments.The Engineering segment comprises of cold rolled steel strips and precision steel tube viz., Cold Drawn Welded tubes (CDW) and Electric Resistance Welded tubes (ERW). The Metal Formed Products segment comprises of Automotive and Industrial chains, fine blanked products, stamped products, roll-formed car doorframes and cold rolled formed sections for railway wagons and passenger coaches.

Segment assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment. Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

Transfer prices between operating segments are on an arm''s length basis in a manner similar to transactions with third parties.

Cash Flow Hedges

Foreign Exchange Forward Contracts measured at Fair Value through OCI are designated as Hedging Instruments in cash flow hedges of forecast sales in EUR and USD, and also for forecast purchases in USD, EUR and JPY. Currency Swaps measured at Fair Value through Profit and Loss are designated as Hedging Instruments in cash flow hedges of floating rate long term borrowings in USD.

The management assessed that cash and cash equivalents, trade receivables, loans, current investments, other financial assets, short term borrowings, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

ii. The fair values of certain unquoted equity investments have been estimated using Discounted Cash-flow Model (DCF). The valuation is based on certain assumptions like forecast cash-flows, discount rate, etc.

iii. The fair value of borrowings is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return, adjusted for the Credit spread considered by the lenders for instruments of the similar maturity.

iv. Derivatives are fair valued using market observable rates and published prices.

Note 8. Financial Risk Management Objectives and Policies

The Company''s principal financial liabilities, other than derivatives, comprise of borrowings and trade payables. The main purpose of these financial liabilities is to raise finance for the Company''s operations. The Company has various financial assets such as trade receivables, cash and short-term deposits, which arise directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken.

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 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.

i Foreign Currency Exchange Rate Risk

The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective consolidated entities.

The Company, as per its forex policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its forex policy.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 5%.

Foreign Currency Sensitivity

The following tables demonstrate the sensitivity to 5% appreciation in USD and EURO exchange rates on foreign currency exposures as at the year end, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company''s exposure to foreign currency changes for all other currencies is not material.

Conversely, 5% depreciation in the USD and Euro rates against the significant foreign currencies as at 31st March 2019 and 31st March 2018 would have had the same but opposite effect, again holding all other variables constant.

ii Equity Price Risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The majority of the Company''s investments are in the shares of group companies, which are carried at cost. The Company has investments in other equity investments, of only Rs,8.60 Cr. as at 31st March 2019. (As at 31st March 2018 - Rs,11.12 Cr.)

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 trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks. Exposure to Credit risk - The carrying amount of financial assets represents the maximum Credit exposure. The maximum exposure to Credit risk was Rs,635.02 Cr. as at 31st March 2019 and Rs,637.21 Cr. as at 31st March 2018, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables and other financial assets excluding equity investments.

As at 31st March 2019, the company had 141 customers (as at 31st March 2018 - 116 customers) that owed the Company more than Rs,1 Crore each and accounted for approximately 94% (as at 31st March 2018 - 86%) of the total trade receivables outstanding. There were 10 customers (as at 31st March 2018 12 Customers) with balances greater than Rs,10 Crores accounting for around 27% of the trade receivables (Previous year - 32%).

Credit risk from balances with banks and investment of surplus funds in mutual funds is managed by the Company''s treasury department. The objective is to minimize the concentration of risks and therefore mitigate financial loss.

Of the above, Rs,73.02 Cr. (Previous year - Rs,48.91 Cr.) is backed by Export Credit Guarantee Cover / Letter of Credit as at 31st March 2019.

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. Furthermore, the Company has access to funds from debt markets through commercial paper, non-convertible debentures, and other debt instruments. 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 risks. The Company also invests 15% of the non-convertible debentures (taken by the Company) falling due for repayment in the next 12 months in bank deposits, to meet the regulatory norms of liquidity requirements.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

As at 31st March 2019, the Company has undrawn committed lines of Rs,211.87 Cr. (As at 31st March 2018 - Rs,296.14 Cr.)

The table below provides details regarding the contractual maturities of financial liabilities based on Contractual undiscounted payments:

Note 9. 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 internal accruals, nonconvertible debentures, external commercial borrowings 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 capital employed using a Debt equity ratio, which is total debt divided by total equity and maturity profile of the overall debt portfolio of the Company.

Note 10. Previous Year''s figures

The Company has reclassified / regrouped previous year figures to conform to this year''s classification.


Mar 31, 2018

1. General Information of the Company Corporate Information

Tube Investments of India Limited (“the Company”) with CIN No: L35100TN2008PLC069496, was formerly known as TI Financial Holdings Limited and is a Public Limited Company domiciled in India. The Company is listed on BSE and National Stock Exchange. The Registered Office of the Company is located at 234, NSC Bose Road, Chennai, Tamilnadu. The Company was originally incorporated as TI Financial Holdings Limited on 6th October 2008 under the Companies Act, 1956, as a wholly-owned subsidiary of erstwhile Tube Investments of India Limited (“Demerged Company”).

Pursuant to the Scheme of Arrangement (“the Scheme”) the details relating to which are more elaborately provided under Note 2 below, the Manufacturing Business Undertaking of the Demerged Company was vested in / transferred to the Company and the Name of the Company was changed to “Tube Investments of India Limited”.

The Company has manufacturing locations across the Country and has three product segments namely, Cycles and Accessories, Engineering and Metal Formed Products. The Company also has Subsidiaries and Joint Venture Companies, Viz., Shanthi Gears Limited, Financiere C10 SAS, Sedis SAS, Sedis Gmbh, SEDIS Co Limited, Great Cycles (Private) Limited, Creative Cycles (Private) Limited, TI Tsubamex Private Limited and TI Absolute Concepts Private Limited.

The standalone financial statements were authorised for issue in accordance with a resolution of the directors on 7th May 2018.

2. Scheme of Arrangement

The Scheme of Arrangement (“the Scheme”) between the Company (“Resulting Company”) and TI Financial Holdings Limited, formerly known as Tube Investments of India Limited (“Demerged Company”) and their Shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, was approved by the Board of Directors of both the Companies on 3rd November 2016.

The Demerged Company, interalia, was engaged in manufacturing of tubes, strips, tubular components, bicycles and fitness products, chains for automobile sector and industrial applications, roll-formed sections, other metal formed products, industrial gears, designing and manufacturing of dies (“Manufacturing Business Undertaking”). The Manufacturing Business is also carried out through subsidiaries and Joint Venture Companies (Shanthi Gears Limited, Financiere C10 SAS, Sedis SAS, Sedis Gmbh, SEDIS Co Limited, TI Tsubamex Private Limited and TI Absolute Concepts Private Limited).

The Scheme provided for the demerger of the Manufacturing Business Undertaking of the Demerged Company into this Company, on a going concern basis, with effect from the appointed date of 1st April 2016.

The salient features of the Scheme of Arrangement are as under:

a. The Demerged Company and the Company has made applications and/or petitions under Section 230 read with Section 232 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 to the National Company Law Tribunal, Chennai (“Tribunal” or “NCLT”) for sanction of this Scheme and all matters ancillary or incidental thereto.

b. The whole of the undertaking and assets and properties of the Manufacturing Business Undertaking of the Demerged Company, shall stand transferred to and vested in the Company with all the rights, title and interest pertaining to the Manufacturing Business Undertaking.

c. The Scheme of Arrangement has become effective from the Appointed Date i.e. 1st April 2016 but operative from the Effective Date i.e. 1st August 2017 being the date of filing of a certified copy of the Order of NCLT by the Company and the Demerged Company with the Registrar of Companies, Tamil Nadu, Chennai.

d. Equity Share Capital of the Company

i. Equity Share Capital of Rs.0.11 Cr. Of the Company as on the Appointed Date stands cancelled and credited to Capital Reserve.

ii. The Company has issued and alloted 1 (One) fully paid up Equity Share of Rs.1 (Rupee One Only) each for every 1 (One) fully paid up Equity Share of Rs.2 (Rupees Two) each held in the Demerged Company.

3. Basis of Preparation

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended.

The standalone financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:

- Derivative financial instruments

- Certain financial assets and financial liabilities measured at fair value (refer accounting policy regarding financial instruments)

The standalone financial statements are presented in INR and all values are rounded to the nearest crore, except when otherwise indicated.

As at 31st March 2018, the Fair Value of the properties is Rs.6.74 Cr. (31st March 2017 - Rs.6.48 Cr.)

The Fair values of the Investment Properties are determined by external independent valuer based on current prices in the market. The resulting Fair value Estimates are classified under level 2 of the Fair value Hierarchy (Refer Note 42.2).

The Company has no restrictions on the disposal of its Investment Property and no contractual obligations to purchase, construct or develop Investment Property or for Repairs, Maintenance and Enhancements.

Notes:

a. During the year, the Company acquired 80% stake in Great Cycles (Private) Limited, Srilanka and has become a Subsidiary Company. The Company has purchased 40,00,000 Equity Shares of face value of LKR 10 each of at Rs.10 per share amounting to Rs.16.98 Cr.

b. During the year, the Company acquired 80% stake in Creative Cycles (Private) Limited, Srilanka and has become a Subsidiary Company. The Company has purchased 40,00,000 Equity Shares of face value of LKR 10 each of at Rs.10 per share amounting to Rs.6.47 Cr.

c. During the year, the Company subscribed to 40,00,000 Equity Shares of face value of Rs.10 each of TI Tsubamex Private Limited (TTPL), a Joint Venture Company at Rs.10 per share amounting to Rs.4.00 Cr.

d. During the year, the Company subscribed to 37,50,000 Equity Shares of face value of Rs.10 each of TI Absolute Concepts Private Limited (TIACPL), a Joint Venture Company at Rs.10 per share amounting to Rs.3.75 Cr.

During the year, the Company has invested an aggregate amount of Rs.1198.10 Cr. (Previous Year - Rs.1799.96 Cr.) in the units of various Cash Management Schemes of Mutual funds, for the purpose of deployment of temporary cash surplus and has Nil (Previous Year - Rs.102.08 Cr.) in various schemes of mutual funds. The total consideration received on the sale of units during the year was Rs.1302.21 Cr. (Previous Year - Rs.1708.57 Cr.)

As at 31st March 2018, the Company had undrawn committed borrowing facilities of Rs.287.53 Cr. (31st March 2017 -Rs.224.03 Cr.).

Pursuant to the Scheme of Arrangement (Refer Note 2), the Cash and Cash Equivalents taken over as at 1st April 2016 is Rs.607.54 Cr. For the purpose of Cash Flow Statement under Ind AS, the Bank Overdraft / Cash Credit balances of Rs.29.69 Cr. as at 1st April 2016 has been reduced from Cash and Cash equivalents.

b) Terms / Rights attached to class of shares

The Company has only one class of shares referred to as Equity Shares having a par value of Rs.1 each. The holders of Equity Shares are entitled to one vote per share. Dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. Repayment of capital will be in proportion to the number of Equity Shares held by the shareholders.

Pursuant to the Scheme of Amalgamation of Murugappa Holdings Limited and Pressmet Private Limited with Ambadi Investments Private Limited, Murugappa Holdings Limited and Pressmet Private Limited has been merged with Ambadi Investments Limited. Subsequent to this Amalagamation, Ambadi Investments Private Limited has become a public limited company.

d) Status on Global Depository Receipts (GDRs):

Pursuant to the Scheme of Arrangement (Refer Note 2), during the year, the Company issued shares in the ratio of GDRs held by them in the Demerged Company, to a appointed depository. The appointed depository shall hold such shares on behalf of the holders of the Demerged Company GDRs. Consequently, the aggregate number of GDRs deemed to be outstanding as at 31st March 2018 is 42,30,630 (As at 31st March 2017 - 42,30,630) each representing one Equity Share of Rs.1 face value. GDR % against total number of shares is 2.26%. The GDRs carry the same terms / rights attached to Equity Shares of the Company.

b. Securities Premium Reserve - The Securities premium received during the year represents the premium received towards allotment of 45,777 shares. This balance will be utilised in accordance with the provisions of Section 52 of the Companies Act towards issuance of fully paid bonus shares, write-off of preliminary expenses, commission / discount expenses on issue of shares / debentures, premium payable on redemption of redeemable preference shares / debentures and buy back of its own shares / securities under Section 68 of the Companies Act.

c. Retained Earnings - The amount that can be distributed by the Company as dividends to its Equity Shareholders is determined based on the financial statements of the Company and also considering the requirements of the Companies Act, 2013. Thus, the amounts reported above are not distributable in entirety.

d. Share Option Outstanding Account - Under Ind AS 102, fair value of the options granted is to be expensed out over the life of the vesting period as employee compensation costs reflecting period of receipt of service. Stock options granted but not vested as on the transition date were valued for expired period, calculated from the grant date till date of transition, aggregating to Rs.5.43 Cr. and were credited to Share options outstanding account.

e. Cash Flow Hedge Reserve - The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged item.

f. FVTOCI Reserve - This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through Other Comprehensive Income.

g. Capital Reserve - The Share Capital of Rs.0.11 Cr. of the Company as at 31st March 2016, has been cancelled pursuant to the Scheme of Arrangement (Refer Note 2) and the same has been credited to the Capital Reserve in 2016-17.

h. Debenture Redemption Reserve (DRR) - The Companies (Share capital and Debentures) Rules, 2014 (as amended), require the company to create DRR out of profits of the company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures outstanding. Accordingly, the Company has created DRR equal to 25% of the outstanding debentures.

Note - Short term Borrowings have a maturity of up to 6 months with an interest rate range of 7%-10%

During the current year, the company has borrowed fresh short term loans amounting to Rs.1350.00 Cr. and repaid loans to the tune of Rs.1492.86 Cr. relating to Packing Credit, Commercial Paper and other Short Term Working Capital Loans.

A provision is recognised for expected warranty claims on products sold during the last one year (2 years in respect of certain components), based on past experience of the level of returns. It is expected that most of these costs will be incurred within one year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the applicable warranty period for all products sold.

The above Provision represents expected future outflows relating to various tax related matters, timing of which cannot be ascertained. The assumptions used to calculate the provisions are based on past experience of similar matters and professional consultations.

Sale of Products includes Excise Duty collected from customers of Rs.74.57 Cr. (Previous year - Rs.282.63 Cr.).

Sale of Products net of Excise Duty is Rs.4,335.41 Cr. (Previous year - Rs.3,925.14 Cr.)

Sale of Scrap includes Excise Duty collected from customers of Rs.8.81 Cr. (Previous year - Rs.24.69 Cr.).

Sale of Scrap net of Excise Duty is Rs.224.19 Cr. (Previous year - Rs.160.46 Cr.)

Revenue from operations for periods up to 30th June 2017 includes excise duty. From 1st July 2017 onwards the excise duty and most indirect taxes in India have been replaced by Goods and Service Tax (GST). The Company collects GST on behalf of the Government. Hence, GST is not included in Revenue from Operations. In view of the aforesaid change in indirect taxes, Revenue from Operations year ended 31st March 2018 is not comparable to 31st March 2017.

Note 4. Components of Other Comprehensive Income (OCI)

The disaggregation of changes to OCI by each type of reserve in Equity is shown below:

Note 5. Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Company’s Standalone Financial Statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a. Judgements

In the process of applying the Company’s accounting policies, management has not made any judgements, which have significant effect on the amounts recognised in the Standalone Financial Statements.

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

i. Impairment of Non-Financial Assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model.

ii. Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

iii. Employee Benefits

The cost of the defined benefit gratuity plan and other post-employment leave encashment benefit and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit obligations are given in Note 36.

iv. Fair Value Measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, Credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 42 for further disclosures.

Note 6. Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

Ind AS 115 Revenue from Contracts with Customers

Ind AS 115 was notified on 28th March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This new standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions of the Company. Ind AS 115 is effective for the Company in the first quarter of fiscal 2019 using either one of two methods: (i) retrospectively to each prior reporting period presented in accordance with Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors, with the option to elect certain practical expedients as defined within Ind AS 115 (the full retrospective method); or (ii) retrospectively with the cumulative effect of initially applying Ind AS 115 recognized at the date of initial application (1st April 2018) and providing certain additional disclosures as defined in Ind AS 115 (the modified retrospective method).

The Company continues to evaluate the available transition methods and its contractual arrangements. The ultimate impact on revenue resulting from the application of Ind AS 115 will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of the contractual arrangements and the mix of business. The Company’s considerations also include, but are not limited to, the comparability of its financial statements and the comparability within its industry from application of the new standard to its contractual arrangements. The Company has established an implementation team to implement Ind AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and processes, and additional disclosure requirements that may be necessary. A reliable estimate of the quantitative impact of Ind AS 115 on the financial statements will only be possible once the implementation project has been completed.

Amendments to Ind AS 112 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112

The amendments clarify that the disclosure requirements in Ind AS 112, other than those in paragraphs B10-B16, apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale.

Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening Equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of Equity, as appropriate), without allocating the change between opening retained earnings and other components of Equity. Entities applying this relief must disclose that fact.

These amendments are effective for annual periods beginning on or after 1st April 2018. These amendments are not expected to have any impact on the Company as the Company has no deductible temporary differences or assets that are in the scope of the amendments.

Transfers of Investment Property - Amendments to Ind AS 40

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use.

Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.

The amendments are effective for annual periods beginning on or after 1st April 2018. The Company will apply amendments when they become effective. However, since Company’s current practice is in line with the clarifications issued, the Company does not expect any effect on its Standalone Financial Statements.

Ind AS 28 Investments in Associates and Joint Ventures - Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice

The amendments clarify that:

- An entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss.

- I f an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent.

The amendments should be applied retrospectively and are effective from 1st April 2018. These amendments are not applicable to the Company.

Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration

The Appendix clarifies that, in determining the date of transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognizes a non-monetary asset or non-monetary liability relating to advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.

Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after:

- The beginning of the reporting period in which the entity first applies the Appendix, or

- The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.

The Appendix is effective for annual periods beginning on or after 1st April 2018. A reliable estimate of the quantitative impact of Ind AS 21 on the financial statements will only be possible once the implementation project has been completed.

Note 7. Stock Options pursuant to Scheme of Arrangement (Refer Note 2)

Pursuant to the Scheme of Arrangement (Refer Note 2), during the year, 3,63,763 stock options were granted to eligible employees at the rate of one stock option of the Company for every stock option held and outstanding in the Demerged Company on the date of the Nomination and Remuneration Committee Resolution dated 21st November 2017.

Further, during the year, the Nomination and Remuneration Committee of the Board of Directors of the Company, at its meeting held on 12th February 2018, approved the grant of 10,86,480 Stock Options and 2,62,200 Stock Options to eligible employees of the Company.

In this regard, the Company has recognised expense amounting to Rs.5.29 Cr for employees services received during the year, shown under Salaries, Wages and Bonus (Refer Note 24).

Note 8. Employee Benefits Obligation Defined Benefit Plan

a. Gratuity

Under the Gratuity plan operated by the Company, every employee who has completed at least five years of service gets a Gratuity on departure at 15 days on last drawn salary for each completed year of service as per Payment of Gratuity Act, 1972. The scheme is funded with an Insurance Company in the form of qualifying insurance policy. The following table summarizes the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet.

Notes:

i. The entire Plan Assets are invested in insurer managed funds with Life Insurance Corporation of India (LIC).

ii. The expected/actual return on Plan Assets is as furnished by LIC.

iii. The estimate of future salary increase takes into account inflation, likely increments, promotions and other relevant factors.

b. Provident Fund

The Company’s Provident Fund is exempted under Section 17 of the The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Conditions for the grant of exemption stipulate that the employer shall make good the deficiency, if any, in the interest rate declared by the Trust over the statutory limit. The Actuary has provided a valuation for Provident Fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions provided below and the Company does not have additional obligation as at 31st March 2018.

d) Contributions to Defined Contribution Plans

During the year, the Company recognised Rs.5.19 Cr. (Previous Year - Rs.5.52 Cr.) to Provident Fund under Defined Contribution Plan, Rs.6.34 Cr. (Previous Year - Rs.5.22 Cr.) for Contributions to Superannuation Fund and Rs.1.47 Cr. (Previous Year -Rs.1.10 Cr.) for Contributions to Employee State Insurance Scheme in the Statement of Profit and Loss.

a. Draft Assessment Orders received from Income Tax Authorities and Show Cause Notices received from various other Government Authorities, pending adjudication, have not been considered as Contingent Liabilities.

b. The uncertainties and possible reimbursement in respect of the above mentioned contingent liabilities are dependent on the outcome of various legal proceedings and therefore, cannot be predicted accurately.

c. The Company considers the Cash flow in each of the cases to be uncertain and hence considered as Contingent liabilities.

d. As per the Scheme of Arrangement (Refer Note 2), all taxes, duties, cess payable by the Demerged Company relating to the Manufacturing Business Undertaking including all advance tax payments, tax deducted at source or any refunds / credit / claims relating thereto shall, for all purposes, be treated as advance tax payments, tax deducted at source or refunds / credit / claims, as the case may be, of the Company, provided however that any direct and indirect taxes that cannot specifically be earmarked as the liability or refunds / credit / claims relating to the Manufacturing Business Undertaking shall continue to be borne by the Demerged Company. The Scheme further provides that if the Demerged Company or their successor(s) receives any refunds / credit / claims or incurs any liability in respect of the Manufacturing Business Undertaking, the same shall be on behalf of and as a trustee of the Company and the same shall be refunded to / paid by the Company.

Note 9. Disclosure in respect of Related Parties pursuant to Ind AS 24 a) List of Related Parties

I. Subsidiary Companies

a. Shanthi Gears Limited

b. Financiere C10 SAS and its Subsidiaries namely:

i. Sedis SAS

ii. Sedis Company Limited

iii. Sedis Gmbh

c. Great Cycles (Private) Limited (with effect from 9th March 2018)

d. Creative Cycles (Private) Limited (with effect from 9th March 2018)

II. Joint Venture Company

a. TI Tsubamex Private Limited

b. TI Absolute Concepts Private Limited

III. Company having Significant Influence

a. Ambadi Investments Limited (Refer Note 12c)

b. Parry Agro Industries Limited

c. Parry Enterprises India Limited

IV. Key Management Personnel (KMP)

a. Mr. L. Ramkumar - Managing Director

b. Mr. Vellayan Subbiah - Managing Director Designate (with effect from 19th August 2017)

c. Mr. S. Suresh - Company Secretary

d. Mr. K Mahendra Kumar - Chief Financial Officer

V. Non executive Directors

a. Mr. M M Murugappan, Chairman

b. Mr. Hemant M Nerurkar

c. Mr. Pradeep V Bhide

d. Mr. S Sandilya

e. Ms. Madhu Dubhashi

f. Mr. Ramesh K B Menon (with effect from 16th November 2017)

Terms and Conditions of transaction with Related Parties

The sale to and purchases from Related Parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in Cash. For the year ended 31st March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by Related Parties (Refer Note 10b and Note 16b for Trade Receivables and Trade Payables respectively).

For management purposes, the Company’s operations are organised into three major segments - Cycles and Accessories, Engineering and Metal Formed Products.

The Management Committee headed by Managing Director (CODM) consisting of Chief financial officer, Leaders of Strategic Business Units and Human resources have identified the above three reportable operating segments. It reviews and monitors the operating results of the operating segments for the purpose of making decisions about resource allocation and performance assessment using profit or loss and return on capital employed.

The Cycles and Accessories segment comprises of Standard bi-cycles, Special bi-cycles including alloy bikes and Speciality performance bikes and fitness equipments. The Engineering segment comprises of cold rolled steel strips and precision steel tube viz., Cold Drawn Welded tubes (CDW) and Electric Resistance Welded tubes (ERW). The Metal Formed Products segment comprises of Automotive and Industrial chains, fine blanked products, stamped products, roll-formed car doorframes and cold rolled formed sections for railway wagons and passenger coaches.

Segment assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment. Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

The Company has operating lease agreements for certain office space and residential accommodation which are generally cancellable in nature. As per the lease terms, an amount of Rs.18.30 Cr. (Previous Year - Rs.21.37 Cr.) has been recognised in the Statement of Profit and Loss.

Note 10. Hedging activities and derivatives Cash Flow Hedges

Foreign Exchange Forward Contracts measured at Fair Value through OCI are designated as Hedging Instruments in cash flow hedges of forecast sales in EUR and USD, and also for forecast purchases in USD, EUR and JPY. Currency Swaps measured at Fair Value through Profit and Loss are designated as Hedging Instruments in cash flow hedges of floating rate long term borrowings in USD.

The management assessed that cash and cash equivalents, trade receivables, loans, current investments, other current financial assets, short term borrowings, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

ii. The fair values of certain unquoted equity investments have been estimated using Discounted Cash-flow Model (DCF). The valuation is based on certain assumptions like forecast cash-flows, discount rate, etc.

iii. The fair value of borrowings is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return, adjusted for the Credit spread considered by the lenders for instruments of the similar maturity.

iv. Derivatives are fair valued using market observable rates and published prices.

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities:

The Company’s principal financial liabilities, other than derivatives, comprise of borrowings and trade payables. The main purpose of these financial liabilities is to raise finance for the Company’s operations. The Company has various financial assets such as trade receivables, cash and short-term deposits, which arise directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.

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 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.

i. Foreign Currency Exchange Rate Risk

The fluctuation in foreign currency exchange rates may have potential impact on the Income Statement and Equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective consolidated entities.

The Company, as per its forex policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its forex policy.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 5%.

Foreign Currency Sensitivity

The following tables demonstrate the sensitivity to 5% appreciation in USD and EURO exchange rates on foreign currency exposures as at the year end, with all other variables held constant. The impact on the Company’s Profit Before Tax is due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not material.

Conversely, 5% depreciation in the USD and Euro rates against the significant foreign currencies as at 31st March 2018 and 31st March 2017 would have had the same but opposite effect, again holding all other variables constant.

ii. Equity Price Risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The majority of the Company’s investments are in the shares of group companies, which are carried at cost. The Company has investments in other equity investments, routed through FVTOCI of only Rs.11.12 Cr. as at 31st March 2018. (As at 31st March 2017 - Rs.12.19 Cr.)

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 trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.

Exposure to Credit risk - The carrying amount of financial assets represents the maximum Credit exposure. The maximum exposure to Credit risk was Rs.637.27 Cr. as at 31st March 2018 and Rs.579.38 Cr. as at 31st March 2017, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables and other financial assets excluding equity investments.

At 31st March 2018, the company had 116 customers (as at 31st March 2017 - 108 customers) that owed the Company more than Rs.1 Crore each and accounted for approximately 86% of the total trade receivables outstanding. There were 12 customers (as at 31st March 2017 - 8 Customers) with balances greater than Rs.10 Crores accounting for around 32% of the trade receivables (Previous year - 25%).

Credit risk from balances with banks and investment of surplus funds in mutual funds is managed by the Company’s treasury department. The objective is to minimise the concentration of risks and therefore mitigate financial loss.

Of the above, Rs.48.91 Cr. (Previous year - Rs.65.55 Cr.) is backed by Export Credit Guarantee Cover / Letter of Credit as at 31st March 2018.

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. Furthermore, the Company has access to funds from debt markets through commercial paper, non-convertible debentures, and other debt instruments. 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 risks. The Company has also invested 15% of the non-convertible debentures (taken by the Company) falling due for repayment in the next 12 months in bank deposits, to meet the regulatory norms of liquidity requirements.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

As at 31st March 2018, the Company has undrawn committed lines of Rs.287.53 Cr. (As at 31st March 2017 - Rs.224.03 Cr.)

The table below provides details regarding the contractual maturities of financial liabilities based on Contractual undiscounted payments:

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 internal accruals, nonconvertible debentures, external commercial borrowings 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 capital employed using a Debt Equity ratio, which is total debt divided by total equity and maturity profile of the overall debt portfolio of the Company.

Note 11. Previous Year’s figures

The Company has reclassified / regrouped previous year figures to conform to this year’s classification.


Mar 31, 2017

Note 1. Significant Accounting Judgments, Estimates and Assumptions

The preparation of the Company’s Standalone Financial Statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a. Judgments

I n the process of applying the Company’s accounting policies, management has not made any judgments, which have significant effect on the amounts recognized in the Standalone Financial Statements.

b. Estimates and Assumptions

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

i. Impairment of Non-Financial Assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on Discounted Cash Flow (DCF) model.

ii. Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

iii. Employee Benefits

The cost of the defined benefit gratuity plan and other post-employment leave encashment benefit and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit obligations are given in Note 35.

iv. Fair Value Measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, Credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 41 for further disclosures.

Note 2. Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the company’s financial statements are disclosed below. The company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and has amended the following standard:

Amendments to Ind AS 7, Statement of Cash Flows

The amendments to Ind AS 7 requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of the amendment, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after 1st April 2017. Application of this amendment will not have any recognition and measurement impact. However, it will require additional disclosure in the financial statements.

Amendments to Ind AS 102, Share-based Payment

The MCA has issued amendments to Ind AS 102 that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction, the classification of a share-based payment transaction with net settlement features for withholding tax obligations, and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. The amendments are effective for annual periods beginning on or after 1st April 2017. The company is assessing the potential effect of the amendments on its financial statements.

The company will adopt these amendments from their applicability date.

Note 3. Stock Options pursuant to Scheme of Arrangement (Refer Note 2)

Pending completion of the listing of the shares of the Company, stock options have not been granted to the eligible employees who have been transferred to the Company from the Demerged Company. Further, the Nomination and Remuneration Committee (NRC) of the Demerged Company has not decided on the manner of adjustment of the exercise price of the existing options of the Demerged Company and accordingly the exercise price of the Employee Stock Option Place (ESOPs) to be granted by the Company is currently not determinable.

In view of the above, no adjustments have been made to the financial statements of the Company with respect to accounting for the cost of the ESOPs to be granted pursuant to the Scheme as well as related disclosures as required under Ind AS. Further, the Diluted EPS of the Company for the current year does not consider the dilutive component pertaining to the ESOPs to be granted pursuant to the Scheme, pending determination of the exercise price as well as grant of such stock options by the Company. Management believes that consequential effect on these financial statements would not be material.

Note 4. Employee Benefits Obligation Defined Benefit Plan a. Gratuity

Under the Gratuity plan operated by the Company, every employee who has completed at least five years of service gets a Gratuity on departure at 15 days on last drawn salary for each completed year of service as per Payment of Gratuity Act, 1972. The scheme is funded with an Insurance Company in the form of qualifying insurance policy. The following table summarizes the components of net benefit expense recognized in the Statement of Profit and Loss (P&L) and the funded status and amounts recognized in the Balance Sheet.

i. The entire Plan Assets are invested in insurer managed funds with Life Insurance Corporation of India (LIC).

ii. The expected / actual return on Plan Assets is as furnished by LIC.

iii. The estimate of future salary increase takes into account inflation, likely increments, promotions and other relevant factors.

b. Provident Fund

The Company''s Provident Fund is exempted under Section 17 of the The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. Conditions for the grant of exemption stipulate that the employer shall make good the deficiency, if any, in the interest rate declared by the Trust over the statutory limit. The Actuary has provided a valuation for Provident Fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions provided below, the Company does not have additional obligation as at 31st March 2017.

b. The uncertainties and possible reimbursement in respect of the above mentioned contingent liabilities are dependent on the outcome of various legal proceedings and therefore, cannot be predicted accurately.

c. The Company considers the Cash flow in each of the cases to be uncertain and hence considered as Contingent liabilities.

d. As per the Scheme of Arrangement, all taxes, duties, cess payable by the Demerged Company relating to the Manufacturing Business Undertaking including all advance tax payments, tax deducted at source or any refunds / credit / claims relating thereto shall, for all purposes, be treated as advance tax payments, tax deducted at source or refunds / credit / claims, as the case may be, of the Company, provided however that any direct and indirect taxes that cannot specifically be earmarked as the liability or refunds / credit / claims relating to the Manufacturing Business Undertaking shall continue to be borne by the Demerged Company. The Scheme further provides that if the Demerged Company or their successor(s) receives any refunds / credit / claims or incurs any liability in respect of the Manufacturing Business Undertaking, the same shall be on behalf of and as a trustee of the Company and the same shall be refunded to / paid by the Company.

Note 5. Disclosure in respect of Related Parties pursuant to Ind AS 24 a) List of Related Parties I. Subsidiary Companies

a. Shanthi Gears Limited

b. Financiere C10 SAS and its Subsidiaries namely:

i. Sedis SAS

ii. Societe De Commercialisation De Composants Industriels - SARL (S2CI) (merged with Sedis SAS)

iii. Sedis Company Limited.

iv. Sedis GmbH

II. Joint Venture Company

a. TI Tsubamex Private Limited

b. TI Absolute Concepts Private Limited

III. Company having Significant Influence and other entities of the Group

a. Murugappa Holdings Limited

b. Ambadi Investments Private Limited

c. Parry Agro Industries Limited

d. Parry Enterprises India Limited

IV. Key Management Personnel (KMP)

a. Mr. L. Ramkumar - Director (Ceased to be Director from 1st August 2017)

b. Mr. S. Suresh - Director (Ceased to be Director from 1st August 2017)

c. Mr.N. Prasad - Director (Ceased to be Director from 1st August 2017)

d. Mr. K Mahendra Kumar

a. Pursuant to Scheme of Arrangement (Refer Note 2), Mr.L. Ramkumar, Managing Director of the Demerged Company has been moved to the Company and appointed as Managing Director from 1st August 2017.

b. Pursuant to Scheme of Arrangement (Refer Note 2), Mr.K. Mahendrakumar, Chief Financial Officer of the Demerged Company has been moved to the Company and appointed as Chief Financial Officer from 1st August 2017.

c. Pursuant to Scheme of Arrangement (Refer Note 2), Mr.S. Suresh, Company Secretary of the Demerged Company has been moved to the Company and appointed as Company Secretary from 1st August 2017.

d. Pursuant to the Scheme of Arrangement (Refer Note 2), all the Employee Benefit expenses have been transferred to the Company from the Demerged Company. Hence the disclosure relating to remuneration of Key Management Personnel is given below.

Terms and Conditions of transaction with Related Parties

The sale to and purchases from Related Parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in Cash. For the year ended 31st March 2017, the Company has not recorded any impairment of receivables relating to amounts owed by Related Parties (Refer Note 10b and Note 16b for Trade Receivables and Trade Payables respectively).

For management purposes, the Company’s operations are organized into three major segments - Cycles and Accessories, Engineering and Metal Formed Products.

The Management Committee headed by Managing Director (CODM) consisting of Chief financial officer, Leaders of Strategic Business Units and Human resources have identified the above three reportable business segments. It reviews and monitors the operating results of the business segments for the purpose of making decisions about resource allocation and performance assessment using profit or loss and return on capital employed.

The Cycles and Accessories segment comprises of Standard bi-cycles, Special bi-cycles including alloy bikes and Specialty performance bikes and fitness equipments. The Engineering segment comprises of cold rolled steel strips and precision steel tube viz., Cold Drawn Welded tubes (CDW) and Electric Resistance Welded tubes (ERW). The Metal Formed Products segment comprises of Automotive and Industrial chains, fine blanked products, stamped products, roll-formed car doorframes and cold rolled formed sections for railway wagons and passenger coaches. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and are not allocable to any segment. Expenses that are directly identifiable to segments are considered for determining the segment results.

Expenses which relate to the Company as a whole and are not allocable to segments are included under unallocated corporate expenses.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

The management assessed that cash and cash equivalents, trade receivables, loans, current investments, other current financial assets, short term borrowings, trade payables and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

ii. The fair values of certain unquoted equity investments have been estimated using Discounted Cash-flow Model (DCF). The valuation is based on certain assumptions like forecast cash-flows, discount rate, etc.

iii. The fair value of borrowings is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return, adjusted for the Credit spread considered by the lenders for instruments of the similar maturity.

iv. Derivatives are fair valued using market observable rates and published prices.

Note 6 Fair Values Hierarchy

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities:

Note 7. Financial Risk Management Objectives and Policies

The Company''s principal financial liabilities, other than derivatives, comprise of borrowings and trade payables. The main purpose of these financial liabilities is to raise finance for the Company''s operations. The Company has various financial assets such as trade receivables, cash and short-term deposits, which arise directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedures and that the financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.

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 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.

i. Foreign Currency Exchange Rate Risk

The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective consolidated entities.

The Company, as per its forex policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its forex policy.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 5%.

Foreign Currency Sensitivity

The following tables demonstrate the sensitivity to 5% appreciation in USD and EURO exchange rates on foreign currency exposures as at the year end, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not material.

Conversely, 5% depreciation in the USD and Euro rates against the significant foreign currencies as at 31st March 2017 would have had the same but opposite effect, again holding all other variables constant.

ii. Equity Price Risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The majority of the Company''s investments are in the shares of group companies, which are carried at cost. The Company has investments in other equity investments, routed through FVTOCI of only ''12.19 Cr. as at 31st March 2017. (As at 31st March 2016 and 1st April 2015 - Nil)

B. Credit Risk

Credit risk is the risk of financial loss arising from counter party 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 trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.

Exposure to Credit risk - The carrying amount of financial assets represents the maximum Credit exposure. The maximum exposure to Credit risk was ''579.38 Cr. as at 31st March 2017, ''0.05 Cr. as at 31st March 2016 and Nil as at 31st March 2015, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables and other financial assets excluding equity investments.

At 31st March 2017, the company had 108 customers (as at 31st March 2016 and 31st March 2015 - Nil) that owed the Company more than ''1 Crore each and accounted for approximately 75% of the total trade receivables outstanding. There were 8 customers (as at 31st March 2016 and 31st March 2015 - Nil) with balances greater than ''10 Crores accounting for around 25% of the trade receivables.

Credit risk from balances with banks and investment of surplus funds in mutual funds is managed by the Company’s treasury department. The objective is to minimize the concentration of risks and therefore mitigate financial loss.

Of the above, ''65.55Cr. (Previous year - Nil) is backed by Export Credit Guarantee Cover / Letter of Credit as at 31st March 2017.

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. Furthermore, the Company has access to funds from debt markets through commercial paper, non-convertible debentures, and other debt instruments. 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 risks. The Company has also invested 15% of the non-convertible debentures (taken by the Company) falling due for repayment in the next 12 months in bank deposits, to meet the regulatory norms of liquidity requirements.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

As at 31st March 2017, the Company has undrawn committed lines of ''223.19 Cr. (As at 31st March 2016 and 1st April 2015 - Nil)

Note 8. 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 internal accruals, nonconvertible debentures, external commercial borrowings 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 capital employed using a Debt equity ratio, which is total debt divided by total equity and maturity profile of the overall debt portfolio of the Company.

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

Accordingly, the Company has prepared Standalone Financial Statements which comply with Ind AS applicable for periods ending on 31st March 2017, together with the comparative period data as at and for the year ended 31st March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1st April 2015, the Company’s date of transition to Ind AS. There are no adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2015 and the financial statements as at and for the year ended 31st March 2016.

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

1. Since there is no change in the functional currency, the Company has elected to continue with the carrying value for all of its investment property and property plant & equipment as recognized in its Previous GAAP financial as deemed cost at the transition date.

2. The Company has considered the exception under Ind AS 101 to present the investment in subsidiaries, associates and joint venture operations in deemed cost (carrying value under IGAAP).

3. The estimates are consistent with those made in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from FVTOCI - equity shares and Impairment of financial assets based on expected Credit loss model where application of Indian GAAP did not require estimation.

Pursuant to the Scheme of Arrangement mentioned in Note 2, the assets and liabilities relating to manufacturing business undertaking has been transferred from Demerged Company under Indian GAAP. Upon giving effect to the Scheme, the Company has made necessary adjustments to comply with the requirements of Indian Accounting Standards. The effect of transfer pursuant to the Scheme of Arrangement and transition to Ind AS as at 1st April 2016 has been summarized below.

Footnotes to the transition to Ind AS for assets and liabilities taken over, pursuant to scheme of demerger:

1. Reclassification: The assets and liabilities taken over as per the Scheme as at 1st April 2016 have been re-grouped / re-classified, where necessary to comply with the accounting policies of the Company under Ind AS.

2. FVTOCI Financial Assets: Under Indian GAAP, long term investments in non group quoted equity shares were accounted as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, such investments have been designated as FVTOCI investments. Ind AS requires FVTOCI investments to be measured at fair value. Pursuant to the scheme of arrangement, the difference between the instruments fair value and Indian GAAP carrying amount has been recognized as a separate component of equity, in the FVTOCI reserve, net of related deferred taxes as at 1st April 2016.

3. Deferred Tax: The various adjustments to bring the assets and liabilities taken over as per the scheme of arrangement from Indian GAAP to Ind AS as at 1st April 2016 results in temporary differences which needs to be accounted. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.

4. Trade Receivables: Under Indian GAAP, provision for impairment of receivables were created if they remained outstanding over a prescribed period. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL).

5. Derivative Instruments: Under Indian GAAP, the Forward covers taken for Packing Credit Foreign Currency Loans (PCFCs) and Short Term Buyers Credit (STBC) were reinstated as per AS 11 (Premium Amortization Method). The Long Term Buyers Credit (LTBC) and the Currency Swap were taken together to hedge the LTBC interest and principal payments. Since both the derivative and the underlying loan are considered as a single package, they were not valued on a Mark to Market (MTM) basis. This was in line with the synthetic accounting under AS 30 (allowed till 31st March 2016). Under Ind AS, the derivatives needs to valued on MTM basis.

6. Financial Liability at Amortized Cost: Transaction costs for raising NCDs were charged off to the Statement of Profit and Loss as per Indian GAAP. Ind AS requires loans and borrowings to be initially measured at fair value net of directly attributable transaction costs. Subsequently these loans are measured at amortized cost using the Effective Interest Rate (EIR) method.

7. Defined Benefit Obligations: Under both Indian GAAP and Ind AS, costs related to its post-employment defined benefit plan were recognized as cost on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, re-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 recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

Note 9. Performa Balance Sheet and Profit & Loss Account

Pursuant to the scheme of arrangement, the Manufacturing business undertaking of the Demerged Company has been demerged to the Company. Accordingly, the financial statements of the current year includes the Assets, Liabilities, Income and Expenditure of manufacturing business undertaking with effect from 1st April 2016 and is accordingly not comparable with the previous year financial statements of the Company. For the benefit of the users of the financial statements, the Company has opted to present the below preformed financial information of the manufacturing business undertaking in respect of the year ended 31st March 2016, assuming Demerger had taken place on 1st April 2015. This preformed financial information is being provided voluntarily by the Company and is not audited. The preformed financial information is not an indication of the results that would have been attained, if the scheme of arrangement has taken place on an earlier date. The information presented below relating to the Manufacturing business undertaking is based on Indian GAAP financial statements of the Demerged Company for the year ended 31st March 2016, duly adjusted to bring them in line with the accounting policies followed by the Company in the current year, which are based on Indian Accounting Standards.

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