SENSEX NIFTY India | Notes to Account > Engineering - Heavy > Notes to Account from TRF - BSE: 505854, NSE: TRF


BSE: 505854|NSE: TRF|ISIN: INE391D01019|SECTOR: Engineering - Heavy
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« Mar 14
Notes to Accounts Year End : Mar '15
 1.  General corporate information
 TRF Limited, (the Company) incorporated in 1962 has its Registered
 Office at 11 Station Road, Burma Mines, Jamshedpur 831007. The Company
 is listed on the National Stock Exchange of India Limited, BSE Limited
 and The Calcutta Stock Exchange Limited. The Company undertakes turnkey
 projects of material handling for the infrastructure sector such as
 power and ports and industrial sector such as steel plants, cement,
 fertilisers and mining. The Company is also engaged in production of
 such material handling equipments at its manufacturing plant at
 2. Rights, preferences and restrictions attached to shares i) Equity
 The Company has one class of equity shares having a par value of Rs.I0
 per share. Each shareholder is entitled 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 entitled to receive the remaining assets of the
 Company after distribution of all preferential amounts, in proportion
 to the number of equity shares held by the shareholders.
 3. Additional information to the Financial Statements
                                                    As at        As at
                                                    31.03.       31.03.
                                                    2015         2014
                                                  Rs. lac        Rs. lac
 Contingent Liabilities
 a) Sales tax matters in dispute relating
 to issues of applicability and
 classification                                # 22,278.19     20,593.37
 In respect of the above sales tax
 matters in dispute, the Company has
 deposited Rs. 80.19 lac
 (31.03.2013: Rs.15.37 lac) 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          1,415.65       1,006.32
 in dispute relating to
 applicability and
 In respect of the above excise and
 service tax matters in dispute, the
 Company has deposited Rs.40 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                3,450.48       1,543.90
 d) Corporate guarantee given on behalf of
   subsidiary companies
 i) York Transport Equipment (Asia)
    Pte Limited - USD 18.0 M
   (31.03.2014:USD 22.5 m)                      11,284.34      13,544.96
 Loan outstanding against the guarantee         11,045.74      10,792.41
 ii) Dutch Lanka Trailer Manufacturers
     Limited - USD 1.5 m
    (31.03.2014 : USD 1.5 m)                       940.36         903.00
 Load outstanding against the guarantee                 -         185.71
 e) Claims against the Company not acknowledged
 as debt (Primarily of liquidated damages and
 other claims made by customers)                 3,385.76       3,502.48
 f) Others                                         33.42           33.42
 Future cash outflows in respect of above matters are determinable only
 on receipt of judgments/decisionspendingatvariousforums/authorities.
 # Includes an amount of Rs. 18,388.57 lac (31.03.2014 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 office 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 visa 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 made any payment nor department has
 claimed any payment against above impugned demand in respect of appeal
 4. 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.
 5. The Company has incurred losses of Rs. 8,735.12 lac during the
 year ended March 31, 2015 and the accumulated losses as on that date,
 amounting to Rs 16,940.22 lac has eroded the net worth of the Company.
 As at the balance sheet date, the current liabilities of the Company
 exceed the current assets of the Company by Rs. 5,798.88 lac The
 Company is of the view that all potential future losses which has been
 booked during the current year will not result in immediate outflow
 over the next twelve months from the balance sheet date. Further, the
 Company projects operating profits during the next 12 months from the
 balance sheet date and is confident that it will be able to generate
 cash from liquidating the retention money held by the customers for a
 majority of the contracts which are at an advanced stage.  Further, the
 Company expects to generate cash flows from its certain subsidiaries,
 by way of dividend. Given the above facts, the Company will be able to
 sufficiently generate future cash flows to meet the future obligations
 of the Company in the next twelve months from the balance sheet date.
 Accordingly, these financial statements have been prepared on a going
 concern basis and do not include any adjustments relating to the
 recoverability and classification of recorded assets or to amounts and
 classification of liabilities that might result if the Company is
 unable to continue as a going concern.
 6. The management has re estimated the useful life of the fixed
 assets and aligned the useful life with that indicated in Part C of
 Schedule II to the 2013 Act at the commencement of the year. During the
 process the Company has also reclassified certain assets the effect of
 which has been reflected in Adjustment column in Note 11. As per the
 requirements of the transitional provisions, the carrying amount after
 adjusting the residual value (if any) of assets whose remaining useful
 life was nil as at the transition date of Rs. 67.76 lac has been
 recognised in the statement of profit and loss and included as part of
 depreciation for the current year.
 7. 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.
 8. 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. During the previous 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.
 9. Scrap and off-cuts generated at the contract sites are being
 accounted on cash basis, since segregation and quantification of such
 items at the financial year end are not practicable in view of the
 contracts being in progress.
 10. 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.
 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 asprimary 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.
 Information on related party transactions as per Accounting Standards
 (AS) 18 - Related party Disclosures A) List of related parties and
 11. Name of the related party                   Nature of Relationship
 TRF Singapore Pte Ltd.                      Subsidiary Companies the
 TRF Holdings Pte Limited                    of which is held directly
                                             by the
 Adhithya Automotive Application Pvt Ltd     Company
 YORK Transport Equipment (Asia) Pte Ltd.
 YORK Transport Equipment Pty Ltd.
 YORK Sales (Thailand) Co. Ltd
 YTE Transport Equipment (SA) (Pty) Limited
 Rednet Pte Ltd.
 PTYORK Engineering
 YTE Special Products Pte Ltd                Subsidiary Companies the
                                             ownership of which
 Qingdao YTE Special Products Co. Ltd.       is held through subsidiary
 YORK Transport Equipment (India) Pvt. Ltd.
 YORK Transport Equipment (Shanghai) Co. Ltd.
 Dutch Lanka Trailer Manufacturers Limited
 Dutch Lanka Engineering Pvt Ltd
 Dutch Lanka Trailers LLC
 Hewitt Robins International Holding Ltd.
 Hewitt Robins International Ltd.
 Tata Steel Limited                          Promoter Company holding
                                             more than 20%
 Key Managerial Personnel
 Mr. Sudhir L. Deoras                        Managing Director
 12. Previous year''s figures have been regrouped/reclasified where
 necessary to correspond with the current year''s
Source : Dion Global Solutions Limited
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