Notes:
(i) Amounts repayable to related parties of the Company. Interest of 7.00% -13.07% p.a is charged on the outstanding loan balances (as at 31 03.2017 7.00% -13.07% p a.)
(ii) Loans repayable on demand from bank includes cash credit facilities with Bank of India and IDBI Bank The cash credit facilities were secured by hypothecation of all tangible movable assets of the Company including finished and semi-finished stocks, raw materials, stores and book debts ranking pari passu. In addition they were secured by way of second charge on the immovable properties of the Company ranking pari passu. The cash credit facilities from Bank of India and IDBI bank carry a floating interest rate of Bank Base Rate ♦ 380 bps per annum and Bank Base Rate 275 bps per annum respectively
Notes:
(i) Provision for employee benefits include leave, early retirement and termination benefits provided by the Company as per the VSS scheme announced by the Company during the year and revised from time to time.
(ii) The provision for warranty claims incudes warranty given on sale of rolls. Provision for warranty is made based on technical estimates and past experience of such costs. Actual claims may differ from estimates and the difference is recognized in the year of occurrence
Notes:
(i) Term Loans from IDBI Bank Limited was secured by first charge on the property, plant and equipment of the Company. The borrowings carry a floating interest rates (Bank Base Rate BBR 275 bps) with remaining quarterly repayment period of one quarter Unamortized processing fees of current maturities of long term loan amounting to Rs nil (as at 31.03.2017'. Rs. 2.65 lakhs) was adjusted against balances.
(ii) The interest has been accrued on outstanding from related parties for the year ended 31.03.2018, Rs 6.700.00 lakhs (as at 31.03.2017 : Rs. 6,000.00 lakhs) at various rates. (Refer note 16)
29 Segment information
29.1 Products and services from which reportable segments derive their revenues
Operating segments are defined as components of an enterprises for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance. The Company's chief operating decision maker is the Board of Directors of the Company.
The Company has identified business segments (type of products) as reportable segments. The business segments comprise:
a. Roll operation
b. Pig iron operation
c. Ingot operation
d. Engg forgings operation
Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on a reasonable basis. All other expenses which are not attributable or allocable to segments have been disclosed as unallowable expenses.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment All other assets and liabilities are disclosed as unallocable.
31 Employee benefit plan
31.1 Defined contribution plan
The Company participates ina number of defined contribution plans on behalf of relevant personnel. Any expense recognized in relation to these schemes represents the value of contributions payable during the period by them at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior month’s contributions that were not due to be paid until after the end of the reporting period
The Company has recognized, in the Statement of Profit and Loss for the year ended 31.03.2018. an amount of Rs 91 53 lakhs (for the year ended 31.03.2017 Rs. 158.12 lakhs) as expenses under the following defined contribution plans
Asat31 March. 2018, contribution of Rs 14 80 lakhs (asat31 March. 2017 Rs1.46 lakhs) representing amount payable to the Employee Provident Fund, Rs. 0.50 lakh (as at 31 March. 2017 Rs. 0.27 lakh) to superannuation fund and Rs. nil (as at 31 March, 2017 Rs. 0.43 lakh) to employees’ pension scheme in respect of the year ended 31 March 2018 and year ended 31 March, 2017) reporting period had not been paid to the plans
31.2 Defi ned benefit pla n:
The Company operates postretirement benefit plans as follows:
Funded
i) Post retirement gratuity Unlunded
i) Post-Retirement Medical Benefit (PRMB)
ii) Pension to Directors
Notes:
1) The discount rate is based on the prevailing market yields of Indian Government bonds as at the balance sheet date for the estimated term of obligations
2) The plan is funded
3) The estimates of future salary increases considered take into account the inflation, seniority, promotion and other relevant factors.
4) As the Company has prepared the financial statements for the year ended 31 March, 2018 and 31 March, 2017 on not a going concern basis, liability for unfunded defined benefit plans for the year ended 31 March, 2018 is provided for on an actual basis and hence disclosures as required under IndAS 19 "Employee Benefits" related to defined benefit plans have not been made for that period.
The following table sets out the the amount recognized in the financial statements:
Notes to the Financial Statements
32 Related Party Transactions A. List of related parties : i Holding company
Tata Steel Limited
ii. Fellow Subsidiaries
a) Tata Steel Europe Limited
b) The Indian Steel & Wire Products Limited
c) The Tinplate Company of India Limited
d) Jamshedpur Continuous Annealing and Processing Company Private Limited
e) Jamshedpur Utilities & Services Company Limited
f) Tata Metaliks Limited
g) Tata Metaliks Dl Pipes Limited i) Tata Sponge Iron Limited
j) TKM Global Logistics Limited k) TRF Limited
iii. Others - Post employment benefit plan
a) Trustees of Tata Yodogawa Limited Gratuity F und
b) Trustees of Tata Yodogawa Limited Provident Fund
c) Tata Yodogawa Limited Employees’ Pension Fund
d) Tala Yodogawa Limited Superannuation Fund
iv. Key Management Personnel (KMP)
Mr. K. Shankar Marar (Managing Director)
(i) Consequent to the judgment dated 2 May, 2013of Honourable Jharkhand High Court with regard to the applicability of power tariff structure on the Company's Induction Furnace Unit from January 2000, the Jharkhand State Electricity Board (JSEB) had raised rectified energy bill dated 10 June. 2013 for Rs 27.203.00 lakhs (later claim revised to Rs. 26.361.00 lakhs). The rectified energy bill was challenged separately before the Honourable Jharkhand High Court. The Company has also contested the judgment dated 2 May, 2013 on the applicability of power tariff structure by way of filing an appeal before the Honourable Jharkhand High Court which has been admitted on merit on 3 July, 2013. The demand raised by JSEB has been considered as contingent liability in the financial statements.
JSEB had also initiated Certificate proceedings for recovery of Rs. 26.361.00 lakhs against the Company and the Board of Directors, which was challenged before the Certificate Officer. The Certificate Officer in his Order dated 12 December, 2015 has absolved the directors from any liability to the extent the certificate amount is considered. He also directed JSEB to raise revised bills and the Company to pay the same within 15 days of the order. JSEB has raised the revised bill dated 24 December, 2015 for Rs 21.803.67 lakhs. The Company has also challenged the Order dated 12 December, 2015 of the Certificate officer before the Division Bench of the Jharkhand High Court.
On 18 December. 2015, the Division Bench of Jharkhand High Court has passed its Order that "No Coercive Action" shall be initiate against the Company during pendency and final hearing of the Appeals.
On 18 December, 2015, the Division Bench of Jharkhand High Court has passed its Order that '"'No Coercive Action"" shall be initiated against the Company during pendency and final hearing of the Appeals "
(Ii) During the financial year 2000-01. Bihar State Electricity Board (BSEB) had issued circulars revising the fuel surcharge rates for the period from 1996-97 to 1999-2000. Based on management estimate the Company had paid and provided tiled principal amount aggregating to Rs. 43.61 lakhs in the books of account and filed a Letters Patent Appeal (LPA) before the Division Bench of the Jharkhand High Court disputing payment of delayed payment surcharge (DPS) amounting to Rs. 1,232.39 lakhs
Further. The Company had also filed a Special Leave Petition (SLP)before the Hon'ble Supreme Court for seeking relief from payment of DPS. The Supreme Court granted stay on the payment of DPS till final decision by the Jharkhand High Court. The matter is still sub-judice. Pending finalization of the matter no adjustments have been made in the financial statements for the year ended 31 March, 2018
The Company had issued bank guarantee of Rs. 372.00 lakhs relating to above."
(lii) The Company had filed an application with the Director General of Foreign Trade for discharge of export obligation. During the year Export Obligation Discharges Certificate (EODC) has been received and there is no obligation
33.2 Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for Rs nil (as at 31 03.2017: Rs. nil) against which advances paid Rs.nil (as at 31.03.2017: Rs.8 31 lakhs).
34.2 The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses
34.3 There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company
34 4 The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:
35 Financial instruments Capital management
The Company has incurred a loss of Rs. 2,565.64 lakhs during the year ended 31 March, 2018 (incurred a loss of Rs. 8,294.88 lakh during the year ended 31 March, 2017) and the accumulated losses as at 31 March, 2018 amounting to Rs 51,399.45 lakhs (as at 31 March. 2017 amounting to Rs. 48,797.91 lakhs) have eroded the net worth of the Company. The Company's operating results continue to be materially affected by various factors, particularly high pricing pressures due to overcapacity in roll industry, general economic slowdown and unavailability of future financing.
The Board of Directors at their meeting held on 5 September. 2016 have decided to dose the operations of the Company Accordingly, on 6 September. 2016 the Company has filed do sure application u/s 25-0 of the Industrial Disputes Act. 1947 with the State Government Authorities. The application was rejected on 27 October, 2016. The Company has filed a writ petition in the Honourable Jharkhand High Court against the rejection order. The matter is sub judice.
The short term funding requirements are met primarily through issue of non-cumulative redeemable preference shares to the holding company and loans from the holding company
Notes to the Financial Statements
Valuation techniques with observable inputs (Level 2):
This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability .either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes Company's over-the-counter(OTC) derivative contracts.
Valuation techniques with significant unobservable inputs (Level 3):
This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
Investments of the Company are measured at fair value at the end of each reporting period. The following table gives information on determination of its tair value, the valuation technique and inputs used.
Notes:
(I) Includes certain investments whose fair values are Nil.
(ii) Cost of these investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range
Fair value of the Company’s financial assets and financial liabilities that are not measured at fair value on a recurring basis :
The directors consider that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their feir values
C. Financial risk management
The Company's activities expose it to a variety of financial risks which includes market risk (including foreign currency exchange rate risk and interest rate risk),credit risk and liquidity risk.
The Company's focus is to ensure liquidity which is sufficient to meet the Com pan/s operational requirements. The Company monitors and manages key Financial risks so as to minimize potential adverse effects on its financial performance. The Company has a risk management policy which covers the risks assonated with the financial assets and liabilities The details for managing each of these risks are summarized ahead
Market risk
Market risk is the risk that the expected cash flows or fair value of a financial instrument could change owing to changes in market prices. The Company's activities expose it primarily to the financial risks of changes in Foreign currency exchange rate and interest.
Foreign currency exchange rate risk:
Foreign exchange risk comprises of risk that may arise to the Company because of fluctuations in foreign currency exchange rates. Fluctuations in foreign currency exchange rates may have an impact on the Statements of Profit and Loss. At the year end. the Company was exposed to foreign exchange risk arising from the foreign currency payables of the Company.
The carrying amounts of the Company foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Interest rate risk management
The Company is exposed to interest rate risk on current and non-current borrowings outstanding as at the yearend which include both fixed and floating interest rate borrowings.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company's loss for the year ended31.03.2018would increase/decrease by Rs. 33.50 lakhs (for the year ended 31.03.2017 Rs. 61.27 lakhs). Credit risk management
"Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties ar>d obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management regularly. Trade receivables consist of few major customers for sale of product and services Ongoing credit evaluation is performed based on the financial condition of accounts receivables."
Liquidity risk management
Liquidity risk is the risk that the Com pany will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or other financial assets
The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposits and liquid plus schemes of mutual funds, which carry mark to market risk Expected maturity for financial liabilities
36 Exceptional items
(i) Voluntary separation scheme
The Board of Directors in the meeting held on 26 May 2016 had approved a Voluntary Separation Scheme (the VSS Scheme) for employees and a phase wise suspension of operations The Company issued a VSS circular on 31 May. 2016 to all its employees and having evaluated the response from employees subsequently revised the scheme on 5 September. 2016,28 October 2016. 9 March, 2017, 15 May, 2017 and 23 March, 2018. Pursuant to the VSS Scheme, a provision of Rs 2.870.37 lakhs has been recognized as an exceptional item during the previous year The Company, post expiry of the revised VSS. had reviewed the remaining provision against the expenditure, and has considered the balance amount to be adequate to meet the present obligation and probable outflow to settle the current obligation.
(ii) Write back of liabilities
During the year ended 31 March, 2017, the Company has undertaken negotiations for one time full and final settlement of vendor liabilities. Consequent to such settlement, a write back of excess liabilities over the settled amount aggregates to Rs. 605.02 lakhs for the year ended 31.March. 2018and Rs 351.48 lakhs for the year ended 31 March. 2017 has been recognized as an exceptional item
Note
(i) The Company has carried out ifs tax computation in accordance with Ind AS 12 'Income Taxes'. In view of low probability that future taxable profit will be available against which temporary difference can be utilized and on account of preparation of Ind AS financial statements on not a going concern basis, no deferred tax assets have been recognized on unused tax losses.
(ii) Detail of temporary differences, unused tax losses and unused tax credits for which no deferred tax asset is recognized in the balance sheet:
Notes to the Financial Statements
* These would expire between 2020 to 2027 38 Approval of financial statements
The Ind AS financial statements were approved for issue by the Board of Directors on 2 May. 2018 For and on behalf of the Board of Directors
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