Notes forming part of the  financial statements

for the year ended March 31,2016

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 Jamshedpur.

2. Summary of significant accounting policies

2.01 Basisof accounting

The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act 2013 ("the 2013 Act"). The financial statements are brpared under the historical cost convention on going concern and on accrual basis. The accounting policies adopted in the brparation of the  financial statements are consistent with those followed in the brvious year.

2.02 Use of estimates

The brsentation of financial Statements in accordance with Generally Accepted Accounting Principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities as at the date of the  financial statements and the reported amounts of revenue and expenses during the year. Examples ofsuch estimates include estimated cost of contracts, useful life of fixed assets, provision for doubtful debts, employee benefits, provision for taxes. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

2.03 Cash flow statement

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and taxes is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.04 Fixed assets

i) Tangible assets

Tangible assets are stated at cost less accumulated debrciation and impairment losses (ifany) The cost of an asset includes the purchase cost of materials, including import duties and non-refundable taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of qualifying assets are capitalized as part of the cost of the asset until such time that the asset is ready for its intended use. Subsequent expenditure relating to tangible assets are capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its brviously assessed standard of performance. The Company has adopted the provisions of para 46/46A of Accounting Standard (AS) 11 - The Effects of Changes in Foreign Exchange Rates, accordingly, exchange differences arising on restatement/settlement of long-term foreign currency monetary items relating to acquisition of debrciable fixed assets are adjusted to the cost of the respective assets and debrciated over the remaining useful life ofsuch assets.

Debrciation on all tangible fixed assets are provided on a straight line basis using the useful lives brscribed in Schedule II to the Companies Act, 2013

. Summary of significant accounting policies (Contd.)

2.04 Fixed assets (Contd.)

ii) Intangible assets

Intangible assets are stated at acquisition cost, less accumulated amortisation and accumulated impairment (if any) The cost of an intangible asset includes purchase cost (net of rebates and discounts), including any import duties and non-refundable taxes, and any directly attributable costs on making the asset ready for its intended use. Subsequent expenditureon an intangible asset afterits purchase/completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the  asset.

The Cost of Intangible assets are amortized on a straight line basis over their estimated useful life. The cost incurred to acquire any technical knowhow is amortised over its estimated useful life not exceeding six years from the date of transfer of technical know how and cost incurred to acquire software is amortized on a straight line basis over an estimated useful life of five years.

iii) Capital work-in-Progress

Expenditure incurred on construction of assets which are not ready for their intended use are carried at cost less impairment (if any), under Capital work-in-progress. The cost includes the purchase cost of materials, including import duties and non-refundable taxes, any directly attributable costs and Interest on borrowings used to finance the construction of the  asset.

2.05 Impairment of assets

The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of the se assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their brsent value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

2.06 Investments

Long term investments are carried at cost less provision for diminution other than temporary (if any) in value of such investments. Current investments are carried at lower of cost and fair value.

2.07 Lease

Assets leased by the Company in its capacity as a lessee ,where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalised at the inception of the  lease at the lower of the  fair value and the brsent value of the  minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the less or are recognized as operating leases. The Company's significant operating leasing arrangements are for brmises (Office, Residence etc.,) The leasing arrangements which normally have a tenure of eleven months to six years are cancellable with a reasonable notice, and are renewable by mutual consent at agreed terms. The _ aggregate lease rent payable is charged as rent in the statement of profit and loss.

2.08 Inventories and Contract in Progress

Raw materials, work-in-progress and finished products are valued at lower of cost and net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes purchase price, non refundable taxes and duties and other directly attributable costs incurred in bringing the goods to the point of sale. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

Stores and spares are valued at cost comprising of purchase price, non refundable taxes and duties and other directly attributable costs after providing for obsolescence and other losses, where considered necessary.

Value of inventories are generally ascertained on the "weighted average" basis.

2.09 Cash and cash equivalents

Cash and cash equivalents comprises of cash and cheques on hand, remittances in transit, balances in current accounts and deposit accounts with banks having original maturity of three months or less from the date of deposit.

2.10 Revenue recognition

i) Sale of products

Revenue from the sale of products is recognized in the statement of profit and loss when the significant risks and rewards of ownership have been transferred to the buyer, which generally coincides with the delivery of goods to customers. Revenue includes consideration received or receivable, excise duty but net of discounts and other sales related taxes.

ii) Revenue from contracts

Revenue from contracts are recognised on percentage completion method specified under Accounting Standard (AS) 7-Construction Contracts .The stage of completion is determined as a proportion that contract costs incurred for work performed up to the closing date bear to the estimated total costs of respective project. Profit (contract revenue less contract cost) is recognised when the outcome of the  contract can be estimated reliably and for contracts valued up to Rs. 100crore, profit is recognised when stage of completion is 40% or more, and for contracts valued more than Rs. 100 crore, profit is recognised either at 25% stage of completion or an expenditure of Rs. 40 crore whichever is higher. When it is probable that the total cost will exceed the total revenue from the contract ,the expected loss is recognised immediately. For this purpose total contract costs are ascertained on the basis of contract costs incurred and cost to completion of contracts which is arrived at by the management based on current technical data, forecast and estimate of net expenditure to be incurred in future including for contingencies etc. For determining the expected cost to completion of the  contracts, cost ofsteel ,cement and other related items are considered at current market price based on fixed cost purchase orders placed or firm commitments received from suppliers / contractors as these purchase orders and future firm commitments are enforceable over the period of the contracts.

Cost incurred in excess of that considered for revenue recognition, if any, in respect of acontract is carried forward in the Balance Sheet as contracts in progress.

iii) Dividend and Interest income

Dividend income is recognised when the company's right to receive dividend is established. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

2.11 Employee benefits

i) Short term benefits

Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the  year in which the related service is rendered.

ii) Defined contribution plans

Defined contribution plans are those plans where the Company pays fixed contributions to funds/schemes managed by independent trusts or authority. Contributions are paid in return for services rendered by the employees during the year. The Company has no legal or constructive obligation to pay further contributions if the fund/scheme does not hold sufficient assets to pay/extend employee benefits. The Company provides Provident Fund facility to all employees, Superannuation benefits to selected employees. The contributions are expensed as the yare incurred inline with the treatment of wages and salaries. The Company's Provident Fund is exempted under section 17 of Employees' Provident Fund and Miscellaneous Provision Act, 1952. Conditions for exemption stipulate that the Company shall make good deficiency, if any, in the interest rate declared by the trust vis-s-vis interest rate declared by the Employees' Provident Fund Organisation. The liability as on the balance sheet is ascertained by an independent actuarial valuation.

iii) Defined benefit plans

The Company provides gratuity, compensated absence to its employees and pension to retired whole-time directors. Gratuity liabilities are funded and managed through separate trust (except in case of Port and Yard Equipment Division in which the funds are managed by Life Insurance Corporation of India) The liabilities towards leave encashment and pension to retired whole-time directors are not funded. The brsent value of these defined benefit obligations are ascertained by an independent actuarial valuation as per the requirements of Accounting Standards (AS) 15 - Employee Benefits. The liability recognized in the balance sheet is the brsent value of the  defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. All actuarial gains and losses are recognized in the statement of profit and loss in full in the year in which they occur.

2.12 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred. Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the  cost of such assets till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the statement of profit and loss in the period in which they are incurred.

2.13 Earnings Per Share

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares to gether with any dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.

2.14 Foreign currency transactions

i) Foreign currency transactions are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates brvailing on the date of the  transaction. Monetary assets and liabilities in currencies other than the reporting currency (other han derivative contracts and net investment in non-integral foreign operations) and foreign exchange contracts remaining unsettled are remeasured at the rates of exchange brvailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the remeasurement of monetary items, other than long-term foreign currency monetary items are included in the statement of profit and loss.

ii) Net investment in non-integral foreign operations is accounted at the exchange rates brvailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction. Foreign currency monetary items (other than derivative contracts) of the  Company's net investment in non-integral foreign operations outstanding at the balance sheet date are restated at the year-end rates. The exchange differences on restatement of long-term receivables from non-integral foreign operations that are considered as net investment in such operations are accounted as per policy for long-term foreign currency monetary items stated in para (iv) below until disposal of such net investment, in which case the accumulated balance in "Foreign exchange fluctuation reserve" is recognised as income/expense in the same period in which the gain or loss on disposal is recognised.

iii) Foreign Currency forward contracts, other than those entered into to hedge foreign currency risk on unexecuted firm commitments or highly probable forecast transactions are treated as foreign currency transactions and accounted accordingly as per Accounting Standard (AS) 11 - Effects of changes in foreign exchange rates. The difference between the contract rate and spot rate on the date of transaction is recognised as brmium/discount and recognised over the life of the  contract. Exchange differences arising on account of remeasurement and gains and losses arising on account of roll over/cancellation off oreign currency forward contracts are recognised in the statement of profit and loss.

iv) The Company has opted for accounting the exchange difference arising on reporting of long-term foreign currency monetary items in line with the paragraph 46A of Accounting Standard (AS) 11 - Effects of changes in foreign exchange rates. Accordingly exchange difference arising on the settlement and remeasurement of long-term foreign currency monetary items relating to the acquisition of debrciable capital asset are accounted byaddition ordeduction to the cost of the debrciable assets and debrciated over the remaining useful life of such assets. Exchange differences arising on settlement and remeasurement of other long-term foreign currency monetary items are accumulated in "Foreign Currency Monetary Item Translation Difference Account" and amortised over the maturity period/up to the date of settlement of such monetary items, whichever is earlier, and charged to the Statement of Profit and Loss except in case of exchange differences arising on net investment in non-integral foreign operations, where such amortisation is taken to "Foreign exchange fluctuation reserve" until disposal of the  net investment.

2.15 Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information are available and for which operating results are evaluated regularly by the executive management in assessing performance and to take decision on allocation of resources. The accounting policies adopted for the segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of the their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocable revenue/expenses/asset/liabilities".

2.16 Taxes on Income

i) Current tax

Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of the  Income-tax Act, 1961.

ii) Deferred tax

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets against unabsorbed debrciation and carried forward loss under tax laws, are recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets on other timing differences are recognised only to the extent that there is a virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

iii) Minimum alternate tax

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is recognised as an asset in the balance sheet when there is convincing evidence that the Company will pay normal income tax during the specified period and it is probable that future economic benefit associated with it will flow to the Company.

iv) Current and Deferred tax is measured based on the provisions of tax laws and tax rates enacted or substantively enacted as at the Balance Sheet date.

2.17 Provisions, Contingent liabilities and Contingent assets

i) Provision

A provision is recognised when the Company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

ii) Provision for warranty

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.

iii) Contingent liabilities and assets

Contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company, oris a brsent obligation that arises from past events but is not recognised because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation ,ora reliable estimate of the  amount of the  obligation cannot be made. Contingent liabilities are disclosed and not recognised. Contingent assets are neither recognised nor disclosed.

2 Research and development expenses

Research and development costs (other than cost of fixed assets acquired) are charged to the statement of profit and loss in the year in which they are incurred. Fixed assets utilised for research and development are capitalised and debrciated in accordance with the policies stated for fixed assets.

2.1 Derivative contracts

The Company enters into derivative contracts in the nature of foreign currency and interest rate swaps, option contracts to hedge its existing assets and liabilities and foreign currency forward contracts to hedge firm commitments and highly probable transactions. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency Transactions and Translations. All other derivative contracts are marked-to-market and losses are recognised in the statement of profit and loss. Gains arising on the same are not recognised, until realised, on grounds of prudence.

2.2 The Company has incurred loss of Rs. 467.36 lakhs during the year ended March 31,2016(Previous year: Loss of Rs 8,735.12 lakhs) and the accumulated losses as of the  balance sheet date amounting to Rs. 17,407.58 lakhs has eroded the net worth of the Company. The Company expects to generate cash flows from liquidating retention moneys relating to contracts that are in advanced stage of completion and expected dividend remittances from its wholly owned subsidiaries, which will be sufficient to meet future obligations of the Company in the next twelve months from the balance sheet date. Accordingly, the financial statements have been brpared on a going concern basis.

2.3The Board of Directors based on the audited accounts for the year ended March 31,2015 have concluded that the company is a Sick Company within the meaning of Section 3 (1) (o) of the  Sick Industrial Companies (special Provision) Act, 1985 (SICA). The Board of Directors has made a reference under section 15 of SICA to the Board for Industrial and Financial Reconstruction (BIFR).The company has during the year filed a rehabilitation scheme with BIFR.

2.4 The management had 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 financial year 2014-15. During the process the Company has also reclassified certain assets the effect of which has been reflected in "Other reclassification" line in Note 11.

2.5 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 27.01.(e)]. The related sundry debtors balances have been considered in the financial statements as fully recoverable.

2.6 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 yearend are not practicable in view of the  contracts being in progress.

2.7 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.

3. 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 brvailing in the various states of India. Revenue from sales to customers outside India is less than 10% in the current and brvious year. Hence disclosure on geographical segment are not applicable.

4.Previous year's figures have been regrouped / reclassified where necessary to correspond with the current year's classification / disclosure.

For and on behalf of the  Board of Directors

SUBODH BHARGAVA P. S. REDDY

Chairman Managing Director

SUBHASHISH DATTA TARUN KR. SRIVASTAVA

Chief Financial Officer Company Secretary  

Place: Kolkata,

Date:May16, 2016