1 CORPORATE MRNHMTMI
The Limited (the company) is engaged in manufacturing of a
comprehensive range of material handling lifting port and road
construction solutions with integrated customer support and after Sales
Service. Overall the Company''s products and services are termed as
Materials Handling Solutions (MHS). The Company has two manufacturing
facilities - Kamarhatty and Kharagpur in West Bengal. The Company is a
Public Limited Company and is listed in Bombay, Calcutta and National
Stock Exchange in India.
2.1 Rights, Preferences and Restrictions attached to Equity Shares
The Company has one class of Equity Shares having a par value of Rs 10/-
per share. Each shareholder is eligible for one vote per share held.
The Dividend proposed by the Board of Directors is subject to the
approval of the Shareholders in the ensuing Annual General Meeting,
except in case of Interim Dividend. In the event of liquidation, the
Equity shareholders are eligible to receive the remaining assets of the
Company after distribution of all Preferential amounts, in proportion
to their shareholding.
3.1 The above borrowings are secured by a first pari passu charge on
all the current assets of the Company (namely Stocks, Bills Receivable
and Book Debts) and a second pari passu charge on all movable
(excluding such movables as may be agreed by Consortium Bankers from
time to time) fixed assets of the Company, both present and future and
on certain immovable properties of the Company under a joint deed of
hypothecation between the Company and its Consortium Bankers.
4.1 There are no outstanding dues to Micro and Small Enterprises based
on information available with the Company.
5.1 Provision for Warranty:
Warranty which hitherto were accounted during the period of incurrence
are now accounted for on accrual basis. As a result of this the profit
for the year is lower by Rs 70 lacs.
The estimated liability for product warranties is recorded when
products are sold. These estimates are established using historical
information on the nature, frequency and average cost of warranty
claims and management estimates regarding possible future incidence
based on corrective actions on product failures. The timing of outflows
will vary as and when warranty claim will arise - being typically up to
As per the terms of the contracts, the Company provides post-contract
services / warranty support to its customers. The Company accounts for
the post-contract support / provision for warranty on the basis of the
information available with the Management duly taking into account the
current and past technical estimates.
6.1 Based on the valuation report submitted by the valuers appointed
for the purpose, certain items of the Company''s fixed assets (viz.
Freehold and Leasehold Land, Buildings and Plant and Equipment) were
revalued on 31st March,1993 after considering the following factors
- The then estimated current market value pertaining to Leasehold Land
and Freehold Land and Buildings thereon.
- Value of Plant and Equipment based on their the then current cost of
- Adjustments for the then condition, the standard of maintenance,
depreciation up to valuation date etc.
The resultant revaluation surplus of Rs 2,472 Sacs, arising from the
aforesaid revaluation, were transferred to Revaluation Reserve as
reflected in the Company''s annual accounts for 1992-93.
Depreciation on these revalued assets as calculated in the manner
includes an additional charge of Rs 15 lacs (Previous Year Rs 15 lacs)
and an amount equivalent to the additional charge has been transferred
to the Profit and Loss Account from Revaluation Reserve; The effective
depreciation rates (other than for leasehold land) are as per Schedule
XIV to the Companies Act, 195B.
6.2 Ownership of a flat (cost Rs 39 lacs) belonging to the Company in a
Co-operative Housing Society is registered in the name of the Managing
Director of erstwhile Spun dish Engineering Ltd.
6.3 Other adjustments represents borrowing cost capitalized during the
year Rs 342 lacs (Previous Year Nil),
6.4 The amount has been de-capitalized on a prudent basis due to
certain operational constraint regarding the usage of the land.
6.5 Capital Work in Progress includes borrowing costs Rs 397 lacs
(Previous Year Nil).
7.1 Technical Know-how represents technical drawings, designs etc.
relating to manufacture of the Company''s products acquired pursuant to
various agreements conferring the right to manufacture and usage only.
8.1 Employee Benefits
The Company has recognized, in Statement of Profit and Loss for the
year ended 31st March, 2012 an amount of Rs 47 lacs (Previous year Rs 37
lacs) as expenses under defined contribution plans.
(A) Provident Fund
The company has an obligation to fund any shortfall on the yield of the
trust''s investments over the administered interest rates on annual
basis. These administered rates are determined annually predominantly
considering the social rather than economic factors. Based on the final
guidance for measurement of Provident Fund liabilities issued by the
Actuarial Society of India, the Company''s liability at the year end
of Rs 57 lacs has been actuarially determined by an independent
authority. The Company has contributed for the year ended 31st March
2012 an amount of Rs 172 lacs (Previous year Rs161 lacs) at Provident
(B) Superannuation Fund :-
(i) Certain eligible employees of the Company who had attained at least
45 years of age as on 1 st April,2009 are entitled to Superannuation
benefit under the Superannuation scheme (a funded Defined Benefit
Planundera common Trust- Tractors India Limited Superannuation Fund
Scheme'', being administered by the trustees of the said fund for the
benefit of employees of the Company and its subsidiary company i.e.
Tractors India Private Limited). Under the aforesaid benefit scheme the
Company makes periodic contribution to the Superannuation Fund Scheme
and a predetermined percentage of salary is paid as pension on
retirement. The quantum of pension depends on the average basic salary
of eligible employee during the last 36 months before retirement. The
benefit vests to employees with 12 years of continuous service and
attainment of 48 years of age on retirement/death/termination. The most
recent actuarial valuation of Plan Assets and Present Value of the
Defined Benefit Obligation of Superannuation Fund was carried out as on
(ii) Employees who did not attain 45 years of age as on 1st April,2009
are under the purview of ''Defined Contribution Scheme'' in respect of
service rendered from 1st April,2009. The benefit of services rendered
by these employees up to 31st March,2009 come under the purview of
''Defined Benefit Scheme'' as indicated which is frozen as on 31st
March,2009, Hence for this category of employees, the benefit of
cessation of service will be:
a) amount accumulated by annual contribution of 15% of Basic Salary and
b) amount frozen as on 31 st March,2009.
(C) Gratuity Fund :-
The Company makes periodic contributions to the Tractors India Limited
Staff Gratuity Fund, a funded defined benefit-plan for qualifying
employees administrated under a common Trust by the trustees of the
said fund for the benefit of the employees of the Company and its
subsidiary company i.e. Tractors India Private Limited,
Under the Gratuity plan, every employee is entitled to gratuity, being
higher of the amount, calculated under the Company''s plan (based on
average salary of last 36 months and number of years of service,
restricted to a maximum of 40 years) or calculations as laid down under
the Payment of Gratuity Act, 1972. Gratuity is payable on death /
retirement / termination and the benefit vests after 5 year of
The most recent actuarial valuation of plan assets and the present
value of the defined benefit obligation was carried out as at 31st
8.2 The basis used to determine overall expected rate of return on
assets and the effect on major categories of Plan Assets is as follows:
The major portions of the Assets are invested in PSU Bonds, State and
General Government Securities. Based on the asset allocation and
prevailing yield rates on these asset classes, the long term estimate
of the expected rate of return on the fund assets have been arrived at.
Assumed rate of return on assets is expected to vary from year to year
reflecting the returns on matching Government Bonds.
8.3 The estimate of future salary increases take into account
inflation, seniority, promotion and other relevant reasons.
9.1 Miscellaneous expenses include charge/(credit) on account of Loss
on Foreign Exchange (Net) of Rs 196 lacs (Previous year Gain of Rs 98
9.2 The Company has various residential / commercial premises taken
under cancellable operating lease. Leases range for periods between 3
to 5 years. Terms of the lease include operating term for renewal,
increase in rent for future periods, terms of cancellation etc. The
operating lease payments for the year amount to Rs 100 lacs (Previous
Year Rs 108 lacs)
9.3 During the year, the Company commenced initial trial run followed
by commercial production (in March 2012) at the Kharagpur location.
Total capitalization of Rs 8,439 lacs (previous year Nil) against these
projects include following trial run expenses (net).
10 CONTINGENT LIABILITIES IN RESPECT OF
31.03.2012 As at
a. Sales Tax Matters under dispute 1,509 369
[Related payments Rs 5
lacs (Previous year Rs 6 lacs)]
b. Income Tax Matters under dispute 303 176
[ Excludes disputed Income Tax
matters, in view of favorable Tribunal
decision in similar case].
[Related payments Rs 93 lacs (Previous
year Rs.48 lacs)]
c. Service Tax matters under dispute 1,213 1,314
[Related payments Rs Nil (Previous
year Rs.217 lacs)]
d. Excise Duty matters under dispute 48 85
[Related payments Rs 23 lacs
(Previous year Rs 23 lacs)]
The management believes that the 6 27
ultimate outcome of these proceedings
will not have a material adverse
effect on the Company''s financial
position and result of operations.
11.1 Based on legal proceedings initiated by the Employees'' Union /
Association and the interim order of the Hon''ble Calcutta High Court
dated 22nd December, 2006 and 18th April, 2007 restraining the Company
from making any contribution / deduction towards Employees'' State
Insurance in respect of its Kamarhatty ( with effect from October,2006
) and Taratolla (with effect from March, 2007) units, in respect of
employees whose monthly salaries (i.e. basic, dearness allowance and
overtime) are between Rs 7,501 and Rs 10,000, no contributions /
deductions have been made and deposited with the appropriate
authorities. The related amounts involved as on 31st March, 2012 being
Employer''s Rs 4 lacs (Previous Year Rs 7 lacs) and Employees'' Rs 1 lacs
(Previous Year Rs 3 lacs),
11.2 Consequent to enhancement of Employees'' State Insurance benefit
ceiling for ''Employee Wages'' from Rs 10,000 to Rs 15,000 per month with
effect from 1 st May 2010, legal proceedings have been initiated by the
Employees'' Union / Association of the Company and an interim order
dated 13th August, 2010 has been issued by the Hon''ble Calcutta High
Court in this regard, restraining the Company from making contribution
/ deduction towards Employees'' State Insurance in respect of
employees whose monthly salaries (i.e. basic, dearness allowance and
overtime) are between Rs 10,001 and Rs 15,000. In view of the said Order,
the Company has neither deducted from the certain concerned employees
nor contributed its own share to the Employees State Insurance Scheme
with effect from 1st August 2010, the related amounts involved as on 31
March, 2012 being Employer''s Rs 3 lacs (Previous Year Rs 1 lac) and
Employees'' Rs 1 lac (Previous Year Rs 0.32 lacs).
12 Pursuant to the Scheme of Arrangement (the ''Scheme'') under
Section 391 to 394 of the Companies Act between the Company i.e. TIL
Limited (the transferor Company) and its wholly owned subsidiary
Tractors India Private Limited (TIPL) (the transferee company), as
sanctioned by the Hon''ble High Court at Kolkata vide order dated 12th
July,2010, the undertaking of the Company pertaining to dealership
business of Caterpillar (comprising Construction and Mining Solutions
and Power System Solutions) has been transferred to and vested in TIPL
on a going concern basis with effect from the appointed date of 1st
The said Scheme has been given effect to in the accounts for the year
ended 31st March 2011 in accordance with the said High Court order.
13 In terms of Accounting Standard (AS) 17 on ''Segment Reporting
notified in the Companies Act, 1956, Segment information has been
presented in the Consolidated Financial Statements [prepared pursuant
to Accounting Standard (AS) 21 on ''Consolidated Financial Statements
notified in the Companies Act, 1956] included in the annual report for
14 The Revised Schedule VI has become effective from 1st April, 2011
for the preparation of Financial Statements. This has significantly
impacted the disclosure and presentation made in the Financial
Statements. Previous year''s figures have been regrouped / reclassified
wherever necessary to correspond with the current years''
classification / disclosure.