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TRF
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« Mar 13
Notes to Accounts Year End : Mar '14
1.  Additional information to the Financial Statements 
 
                                                   As at        As at
                                               31.03.2014    31.03.2013
                                                 Rs. lac      Rs. lac
  
 1.01 Contingent Liabilities
 
 a) Sales tax matters in dispute 
 relating to issues of applicability 
 and classification #                           20,593.37      20,269.89
 
 In respect of the above sales tax 
 matters in dispute, the Company has
 deposited Rs.15.37 lac (31.03.2013: 
 Rs.Nil) against various orders,
 pending disposal of the appeals. 
 This amount is included under Note 14
 - Long term loans and advances.
 
 b) Excise duty and service tax 
 matters in dispute relating to
 applicability and classification                1,006.32       1,004.91
 
 In respect of the above excise and 
 service tax matters in dispute, the
 Company has deposited Rs.2.50 lac 
 (31.03.2013: Rs.2.50 lac) against
 various orders, pending disposal of 
 the appeals. This amount is
 included under Note 14 - 
 Long term loans and advances.
 
 c) Income tax matters in dispute                1,543.90        1021.57
 
 d) Corporate guarantee given on 
 behalf of subsidiary companies
 
 i) York Transport Equipment 
 (Asia) Pte Limited - USD 22.5 m 
 (31.03.2013: USD 22.5 m)                       13,544.96      12,260.09
 
 Loan outstanding against the guarantee         10,792.41       9,663.76
 
 ii) Dutch Lanka Trailer 
 Manufacturers Limited -
 USD 1.5 m (31.03.2013: USD 1.5m)                  903.00         817.34
 
 Loan outstanding against the guarantee            185.71         817.34
 
 e) Claims against the Company not 
 acknowledged as debt (Primarily of 
 liquidated damages and other claims 
 made by customers)                              3,502.48       4,587.84
 
 f)  Others                                         33.42          33.42
 
 Future cash outflows in respect of above matters are determinable only
 on receipt of judgments / decisions pending at various forums /
 authorities.
 
 # Includes an amount of Rs. 18,388.57 lac (31.03.2013 Rs. 18,388.57
 lac) towards differential tax and penalty charged by the Assessing
 Officer for the financial year 2005-06 to 2008-09. The Assessing
 Officer had originally passed the assessment order based on the returns
 filed by the Company. Subsequently based on an objection raised by the
 Accountant General''s Office during their audit the assessing officer
 has raised this demand on 28.01.2013 for additional tax of Rs. 5,985.90
 lac and penalty of Rs.12,402.67 lac. The additional tax is computed by
 the Assessing Officer based on the total turnover reported in the
 annual audited financial statements. The difference in the turnover as
 per the annual financial statements and the returns is on account of
 difference in revenue recognised as per Accounting Standard (AS) - 7
 Construction Contracts vis-a-vis bills actually raised on the customers
 and turnover from turnkey contracts which are executed outside the
 state of Jharkhand for which state of Jharkhand has no jurisdiction.
 The returns for those turnkey contracts are filed with the local VAT
 authorities of the respective states under the respective VAT laws. The
 assessing officer''s contention of suppression in turnover is blatantly
 incorrect and hence the Company filed appeal with the Joint
 Commissioner. The Joint Commissioner after hearing the Company has
 passed orders remanding back the case for reassessment to the
 assessment officer. Based on the order the assessing officer has
 initiated reassessment procedures and the Company has filed its
 reply/documents called by the Assessing Officer. Neither company has
 made any payment nor department has claimed any payment against above
 impugned demand in respect of appeal order.
 
 1.02 The Company''s application seeking exemption from the provisions
 of the Employees State Insurance Act, 1948 has been rejected by the
 Department of Labour, Government of Jharkhand. The Company has filed an
 appeal with the High Court of Jharkhand at Ranchi against the order. In
 the absence of any demand from the authorities the amount of liability
 is not quantifiable.
 
 1.03 No provision has been made for liquidated damages and other
 claims by certain customers, wherever these have been refuted by the
 Company and the management expects to settle them without any loss.
 Pending settlement of these claims, they have been disclosed under
 contingent liabilities as Claims against the Company not acknowledged
 as debt. [Refer Note 28.01.(e)]. The related sundry debtors balances
 have been considered in the financial statements as fully recoverable.
 
 1.04 The Company is offering the retention money to income tax on due
 basis from the financial year 2005-06 onwards. Out of prudence the
 Company was providing for the current tax without considering this
 deferment. The Company''s stand of deferring the retention money has
 been accepted by the tax authorities based on the legal decisions which
 came subsequently. Hence during the current year the Company has
 recomputed the provision for current tax based on the income determined
 in the final assessment orders for the financial year 2005-06 to
 2009-10 and based on the income offered to tax in the tax returns for
 the financial years 2010-11 to 2012-13. The Company has also provided
 for the deferred tax on the net amount of retention deferred in the
 income tax returns.
 
 1.05 Scrap and off-cuts generated at the contract sites are being
 accounted on cash basis, since segregation and quantification of such
 items at the end of the financial year are not practicable in view of
 the contracts being in progress.
 
 1.06 Revision in projected profit/(loss) on contracts arising from
 change in estimates of cost to completion of contracts are reflected
 during the course of the work in each accounting year. These have not
 been disclosed separately in the Financial Statements as the effect
 cannot be accurately determined.
 
 1.07 Previous year''s figures have been regrouped / reclassified where
 necessary to correspond with the current year''s classification /
 disclosure.
 
 1.08 The amortized portion of foreign exchange loss (net) incurred on
 long term foreign currency monetary items for the current year ended
 March 31, 2014 is Rs. 798.39 lac (previous year Rs. 526.61 lac). The
 unamortized portion carried forward as on 31st March, 2014 is Rs.
 521.65 lac (31.03.2013 : Rs. 284.75 lac).
 
 1.09 Segment Reporting
 
 The Company has identified the business segments as primary segment for
 the purpose of reporting under Accounting Standards (AS) 17 - Segment
 Reporting. Revenues and expenses directly attributable to business
 segments are reported under the respective segments. Expenses which are
 not directly identifiable to each of the business segments have been
 allocated on the basis of associated revenues and manpower efforts. All
 other expenses which are not attributable or allocable to business
 segments have been disclosed as unallocable expenses. Assets and
 liabilities that are directly attributable or allocable to business
 segments are disclosed under the respective segments. All other assets
 and liabilities are included as part of unallocable. The Company has
 identified the following business segments as primary segments.
 
 (a) Products & Services
 
 (b) Projects & Services
 
 In the Company''s operations within India there is no significant
 difference in the economic conditions prevailing in the various states
 of India. Revenue from sales to customers outside India is less than
 10% in the current and previous year.  Hence disclosure on geographical
 segment are not applicable.
Source : Dion Global Solutions Limited
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