annual report cover - TRL Krosaki · (a) The relative Explanatory Statements, pursuant to Section...

Fifty fifth annual report 2013-14

TRL

Contents

Board of Directors .....................................................................................................................2

Notice ......................................................................................................................................3

Highlights ..................................................................................................................................7

Directors' Report .......................................................................................................................8

Management Discussion and Analysis ..................................................................................19

Corporate Governance Report ...............................................................................................22

Auditors' Report .....................................................................................................................31

Annexure to the Auditors' Report ...........................................................................................32

Balance Sheet ........................................................................................................................34

Statement of Profit & Loss .....................................................................................................35

Cash Flow Statement .............................................................................................................36

Accounting Policies ................................................................................................................47

Auditors' Report on Consolidated Financial Statements ........................................................56

Consolidated Balance Sheet...................................................................................................58

Consolidated Profit & Loss .....................................................................................................59

Consolidated Cash Flow ........................................................................................................60

Principles of Consolidation .....................................................................................................68

Accounting Policies ................................................................................................................69

The Annual General Meeting will be held on Saturday, 6th September, 2014 at our Registered Office, Belpahar at 1.00 p.m.

As a measure of economy, copies of the Annual Report will not be distributed at the Annual General Meeting.

Shareholders are requested to kindly bring their copies to the meeting.

visit us at : www.trlkrosaki.com, E-mail : [email protected], Tel : +91 6645 258417

2


Board of Directorsth

(As on 12 May 2014)

REGISTERED OFFICE Belpahar - 768218Dist. Jharsuguda (Odisha)

Phone No. : 06645-258417

Fax : 06645-250254

BANKERS Central Bank of India

State Bank of India

HDFC Bank Limited

Mizuho Bank Limited

HSBC Limited

AUDITORS M/s N.M. Raiji & Co.

Chartered Accountants

Mumbai

TRL

Mr. H. M. Nerurkar (Chairman)

Mr. V. S. N. Murty

Mr. Kotaro Kuroda

Mr. Hiroshi Odawara

Mr. Kiyotaka Oshikawa

Mr. Rakesh Kulshreshtha

Mr. Prem Shankar Shrivastava

Mr. Sudhansu Pathak

Mr. Akira Tsuneoka

Mr. Koji Tsuyuguchi

Dr. A. K. Chattopadhyay (Managing Director)

Senior Executives

Mr. C. S. Das . . . . . . . . . . . . . Executive Vice President & CFO

Mr. P. B. Panda . . . . . . . . . . . Executive Vice President & COO

Mr. Sharad K. Sharma . . . . . . Executive Vice President (Sales & Marketing, ICT)

Senior Company Secretary

Mr. Arabinda Debta

3


TRL

Notice

THE FIFTY FIFTH ANNUAL GENERAL MEETING OF TRL KROSAKI REFRACTORIES LIMITED will be held at its Registered Office at Belpahar, Dist: Jharsuguda, Odisha – 768218 on Saturday, the 6th September, 2014, at 1.00 p.m., to transact the following business:

(1) To consider and adopt financial statement for the financial year ending on 31 March, 2014 and the report of the Board of Directors’ and Auditors’ thereon.

(2) To declare dividend.

(3) To appoint a Director in place of Mr. Rakesh Kulshreshtha (DIN: 03196186) , who retires by rotation and is eligible for re-appointment.

(4) To appoint a Director in place of Mr. V.S.N. Murty (DIN: 00092348), who retires by rotation and is eligible for re-appointment.

(5) To appoint a Director in place of Mr. Kiyotaka Oshikawa (DIN: 03515516), who retires by rotation and is eligible for re-appointment.

(6) To appoint Auditors and fix their remuneration.

(7) Authority to Directors to borrow in excess of the paid-up capital and free reserves.

To consider and, if thought fit, to pass with or without modification, the following resolution as Special Resolution:

RESOLVED that the consent of the Company be and is hereby accorded in terms of Section 180(1)(c) and other applicable provisions, if any, of the Companies Act, 2013 to the Board of Directors of the Company for borrowing from time to time any sum or sums of monies which together with the monies already borrowed by the Company (apart from temporary loans obtained or to be obtained from the Company’s bankers in the ordinary course of business) may exceed the aggregate of the paid-up capital of the Company and its free reserves, provided that the total amount so borrowed by the Board shall not at any time exceed the limit of 400 Crores.

(8) Creation of Charges.

To consider and, if thought fit, to pass with or without modification, the following resolution as Special Resolution:

“RESOLVED that pursuant to Section 180(1)(a) and other applicable provisions, if any, of the Companies Act, 2013, consent of the Company be and is hereby given to the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall be deemed to include any Committee thereof) to create such charges, mortgages and hypothecations in addition to the existing charges, mortgages and hypothecations created by the Company, on such movable and immovable properties, both present and future, and in such manner as the Board may deem fit, together with power to take over the management and concern of the Company in certain events in favour of Banks / Financial Institutions, other investing agencies and trustees for the holders of debentures/bonds/other instruments to secure rupee/foreign currency loans and/or the issue of debentures whether partly/ fully convertible or non-convertible and/or securities linked to Ordinary shares and/or rupee/foreign currency convertible bonds and/or bonds with share warrants attached or other instruments (hereinafter collectively referred to as “Loans”) provided that the total amount of loans together with interest thereon, additional interest, compound interest, liquidated damages, commitment charges, premia on pre-payment or on redemption costs, charges, expenses and all other moneys payable by the Company in respect of the said Loans, shall not, at any time exceed the limit of 400 Crores.

RESOLVED FURTHER that the Board be and is hereby authorized to do all such acts, deeds and things, to execute all such documents, instruments and writings as may be required.”

By Order of the Board of Directors

(A. Debta)thBelpahar, 7 August, 2014 Senior Company Secretary

Registered Office :

PO : Belpahar, Dist. JharsugudaOdisha, Pin : 768218CIN : U26921OR1958PLC000349Website : www.trlkrosaki.com

st

4

Fifty fifth annual report 2013-14TRL

Notes :

(a) The relative Explanatory Statements, pursuant to Section 102 of the Companies Act, 2013, in respect of the business under items Nos. 7 & 8 above are annexed hereto. The relevant details of directors seeking appointment / re-appointment under item nos. 3 to 5 above are also annexed.

(b) A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY, OR, WHERE THAT IS ALLOWED, ONE OR MORE PROXIES, TO ATTEND AND VOTE INSTEAD OF HIMSELF, AND THAT A PROXY NEED NOT BE A MEMBER. Proxies, in order to be effective, must be received at the Company’s registered office not less than 48 hours before the meeting. Members are requested to note that a person can act as a proxy on behalf of members not exceeding 50 and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder.

(c) Pursuant to Section 205C of the Companies Act, 1956, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of its transfer to the Unpaid Dividend Account of the Company shall be transferred to the Investor Education and Protection Fund (the Fund) set up by the Government of India and no payments shall be made in respect of any such claims by the Fund. Members who have not yet encashed their dividend warrant(s) for the financial year ended 31st March, 2007 onwards, are requested to make their claims to the Company accordingly, without any delay.

5

TRL

Annexure to Notice

As required by Section 102 of the Companies Act, 2013 (hereinafter referred to as “the Act”) the following Explanatory Statement set out all material facts relating to the business mentioned under item Nos. (7) and (8) of the accompanying Notice dated 7th August, 2014.

1. Item (7): As per Sec 180(1)(c) of the Companies Act, 2013, the Board of Directors of a Company cannot, except with the consent of the Company in general meeting through special resolution, borrow monies, apart from temporary loans obtained from the Company’s bankers in the ordinary course of business, in excess of the aggregate of the paid-up capital and free reserves of the Company.

Taking into consideration the requirements of additional funds to meet the cost of the Company’s Capital Expenditure Programmes and also working capital requirements of the Company, borrowings of the Company may exceed the paid-up capital and free reserves of the Company. The consent of the shareholders is, therefore, sought in accordance with the provisions of Section 180(1)(c) of the Act, to enable the Directors to borrow monies not exceeding 400 Crores.

thShareholders at the 50 Annual General Meeting held on Sept 05, 2009 had approved the same resolution under Section 293(1)(d) of the Companies Act, 1956. Ministry of Corporate Affairs, Govt. of India vide General Circular dated 25.03.2014 clarified that the resolution passed under Section 293 of the Companies Act, 1956 prior to 12.09.2013 with reference to borrowings of the Company will be regarded as sufficient compliance of the requirement of section 180 of the Companies Act, 2013 for a period of one year from the date of notification of the Act. Section 180 of the Companies Act, 2013 notified w.e.f. 12.09.2013 vide Notification F.No.1/15/2013-CL.V. dated 12.09.2013. Thus the earlier resolution approved by the Shareholders is valid upto 11.09.2014. The resolution at Item (7) is to obtain the consent of the shareholders through Special Resolution for this purpose.

None of the Directors, Key Managerial Personnel and their relative is interested or concerned in the resolution.

2. Item (8): As Section 180(1)(a) of the Companies Act, 2013, consent of the shareholders through special resolution is required for the Board of Directors for creation of mortgages, charges and hypothecation of assets of the Company to secure the loans obtained from Banks/Financial Institutions.

To meet the capital expenditure and other requirements and also the increased working capital needs, the Company proposes to obtain in the coming years further financial assistance from Financial Institutions/ Banks/investing agencies by way of loans, issue of debentures/bonds/ other instruments on private placement basis or otherwise as set out in the resolution. The consent of the shareholders is, therefore, sought in accordance with the provisions of section 180(1)(a) of the Companies Act, 2013 to enable the Directors for creation of mortgages, charges and hypothecations of assets of the Company upto a value not exceeding 400 Crores.

To secure such borrowings, the Company would have to mortgage/charge/hypothecate the assets and properties of the Company, both present and future, as may be required by the lenders.

As the documents to be executed between the Company and the lenders/ trustees for the debentures/bonds /other instruments may contain the power to take over the management of the Company in certain events, it is necessary for the Members to pass a Special Resolution under Section 180(1)(a) of the Companies Act,2013 before creation of the mortgages/charges/hypothecations.

thShareholders at the 50 Annual General Meeting held on Sept 05, 2009 had approved the same resolution under Section 293(1)(a) of the Companies Act, 1956. Ministry of Corporate Affairs, Govt. of India vide General Circular dated 25.03.2014 clarified that the resolution passed under Section 293 of the Companies Act, 1956 prior to 12.09.2013 with reference to creation of security on assets of the Company will be regarded as sufficient compliance of the requirement of section 180 of the Companies Act, 2013 for a period of one year from the date of notification of the Act. Section 180 of the Companies Act, 2013 notified w.e.f. 12.09.2013 vide Notification F.No.1/15/2013-CL.V. dated 12.09.2013. Thus the earlier resolution approved by the Shareholders is valid upto 11.09.2014. The Resolution at Item (8) is to obtain the consent of the shareholders through Special Resolution for this purpose.

None of the Directors, Key Managerial Personnel and their relative is interested or concerned in the resolution.

By Order of the Board of Directors

(A. Debta)thBelpahar, 7 August, 2014 Senior Company Secretary

Registered Office :

PO : Belpahar, Dist. JharsugudaOdisha, Pin : 768218CIN : U26921OR1958PLC000349Website : www.trlkrosaki.com

6


Details of the Directors seeking appointment / re-appointment in the forthcoming Annual General Meeting

TRL

Name of Director Mr. Rakesh Kulshreshtha Mr. V.S.N. Murty Mr. Kiyotaka Oshikawa(DIN: 03196186) (DIN: 00092348) (DIN: 03515516)

Date of Birth 08.10.1952 15.04.1951 27.07.1960

Date of Appointment 27.08.2011 05.05.2008 31.05.2011

Expertise in specific Sales, Marketing & Finance & Management Finance, Accounting &functional areas Business Excellence Corporate Planning

Qualifications Bachelor of Metallurgical Graduate in Commerce and Member Bachelor of Political science andEngineering of The Institute of Chartered Economics from Waseda

Accountants of India. University, Japan.

Directorship held in other 1 5 NILpublic Companies (excluding foreign Companies)

Membership / NIL 3 NILChairmanship of Committees of other public Companies (includes only Audit Committees and Shareholders' / Investors' Grievance Committee)

Shareholdings in the NIL NIL NILCompany

7

Highlights

(` Crores)

TRL

2012-13 2011-12 2010-11 2009-10

Turnover 928.89 964.04 926.87 867.17

Profit Before Interest,Depreciation & Taxes 56.86 79.10 100.06 91.56

Depreciation 24.82 23.66 21.46 20.98

Profit before Taxes 9.66 34.76 66.33 59.68

Profit After Taxes 6.92 24.54 42.69 38.47

Retained Earnings 29.29 39.70 25.77 46.04

Shareholders' Funds 272.96 268.48 252.45 248.14

Borrowings 201.60 158.77 113.09 110.38

Dividends 2.45 8.50 38.38 13.41

Shareholders' Funds - per Share(`) 131 128 121 119

Dividend - (%) 10 35 158 55

Employees - (Numbers) 1270 1292 1337 1406

2013-14

917.54

52.66

23.43

3.98

2.89

23.87

273.40

227.07

2.45

131

10

1259

8


Dividend

Performance

Your Directors are pleased to recommend a dividend of ` 1.00 per share, i.e. 10% for the year ended March 31, 2014, for approval by the shareholders at the forthcoming Annual General Meeting.

For the third year in succession, the performance of the Company was deeply impacted by the ill effect of domestic as well as global economic slowdown. The Company suffered a negative growth with a gross turnover of ` 918 Crores against ` 929 Crores of the previous year. However, consolidated revenue which includes revenue of TRL China Limited were ` 1,116 Crores compare to ` 1,074 Crores for the previous year, a growth of around 3.9%.

The standalone gross production during the year was 1,74,213 MT against 2,03,339 MT of the previous year; a decline of around 14.3%. The sales volume was

2,21,920 MT against 2,62,844 MT of the previous year; a decline of around 15.6%. Lower order booking due to lower demand and fierce competition in the market laid to lower capacity utilization.

Lower capacity utilization leading to under absorption of overhead expenses, coupled with un-remunerative refractories prices made the profit before taxes dropping to ` 3.98 Crores against 9.66 Crores of the previous year; a decrease of 59%. The profit after tax was ` 2.89 Crores against ` 6.92 Crores of the previous year; a decrease of 58%. However, consolidated profit was increased to ` 5.96 Crores against loss of 0.66 Crores of the previous year due to improved performance of TRL China Ltd.

The export turnover of the Company for the year was ` 146 Crores against ` 179 Crores of the previous year. Export turnover was lower mainly due to completion of Esfahan Steel, Iran project for construction of Coke-oven Battery and temporary closure of Perwaja Steel due to damage caused to the plant in a natural calamity.

International Business

DIRECTORS' REPORT

Financial Results

thThe Board of Directors here by presents the 55 Annual Report and Audited Statements of Accounts for the financial year ended March 31, 2014.

` ` ` `

Standalone Consolidated

2013-14 2012-13 2013-14 2012-13 Crores Crores Crores Crores

Profit before finance cost depreciation, Employees separation compensation and Taxes 52.96 57.15 70.34 64.08

Less Finance Cost 25.26 22.38 30.28 27.81

Less Depreciation 23.43 24.81 32.73 33.89

Less Employees Separation Compensation 0.29 0.30 0.29 0.30

Profit Before Tax 3.98 9.66 7.04 2.08

Provision for Income Tax :

Current (2.36) (6.16) (2.36) (6.16)

Deferred 1.27 3.42 1.27 3.42

Profit After Taxes 2.89 6.92 5.96 (0.66)

9

09-10

PROFIT BEFORE INTEREST,DEPRECIATION, AMORTISATION

OF EXPENSES AND TAXES(` in Crores)

10-11 11-12 12-13

110 –

100 –

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 –

13-14

1000 –

950 –

900 –

850 –

800 –

750 –

700 –

650 –

600 –

550 –

500 –

09-10 10-11

TURNOVER(` in Crores)

11-12 12-13 13-14

TRL

The consolidated international business was 210 Crores against 218 Crores of the previous year.

During the year, the Company has received "CAPEXIL'S TOP Export Award" for the year 2012-13.

Construction of New Flow Control Products Plant has been completed and trial production is under progress. Commercial production will be started after the product quality is stabilized. Commercial production of Taphole Clay Plant has been started during the year. The Company has signed a technical knowhow agreement with Krosaki Harima Corporation, Japan for manufacturing of Slide Gate Device. Capability of the Company to manufacture Slide Gate Device of AL model will strengthen the Company's position in Flow Control Products market.

Performance of TRL China, a subsidiary of the Company further improved during the year. Performance of MgO-C bricks of TRL China supplied to some customers surpassed performance of its competitors and in many cases, the performance was at par with the competitors. Consistency in performance has enabled TRL China to improve its position in the market. Gross turnover of

New Projects

TRL China Limited

TRL China for the financial year 2013-14 was RMB 241 Million, 19% higher than the financial year 2012-13 gross turnover of RMB 202 Million. TRL China made a net profit of RMB 2 Million in the financial year 2013-14 against a loss of RMB 8.57 Million of the previous year. It has been assessed that performance of TRL China will further improve during the current financial year.

The Company is committed to achieve excellence in health and safety in all its operations. The safety excellence journey started in March 2012 under the guidance of Tata Steel has been continuously strengthened by the introduction of new safety measures. Out of the 60 safety standards developed, 10 safety standards have been implemented based on merits and importance in operation. Proper dress code has been introduced for women employees to ensure their safety. Positive isolation of critical equipment maintenance has been introduced. 100% employees have undergone periodical medical check-up.

During the year the Company received "Best Occupational Health Care Award" and "Best Performance in Accident Prevention, Safety Management and Communication Systems Award" from Government of Odisha. The Company has also received the "Golden Peacock Award"

Health and Safety

10


GROSS AND NET ASSETS(` in Crores)

09-10

GROSS ASSETS

NET ASSETS

10-11 11-12 12-13

450 –

500 –

400 –

350 –

300 –

250 –

200 –

150 –

100 –

50 –

0 –

13-14

NET WORTH AND BORROWINGS(` in Crores)

NET WORTH

BORROWINGS

280 –

260 –

240 –

220 –

200 –

180 –

160 –

140 –

120 –

100 –

80 –

60 –

40 –

20 –

0 –

09-10 10-11 11-12 12-13 13-14

TRL

for occupational health and safety for the year 2013 for the second consecutive time. Greentech Foundation has also conferred "Gold Award" for outstanding achievement in safety management to the Company.

The Company believes that the respect for environment is critical to the success of its business and strives for continuous improvement in environmental performance. The new Taphole Clay Plant and Flow Control Products Plant have been provided with dust filter and pollution control devices to ensure a pollution free workplace. All tarry water generated from Gas Producers is treated in the state-of-the-art Effluent Treatment Plant (ETP) and the treated water, which is completely colourless and odourless, is utilized in the Plant as process water.

The Company focusses on environment management not only to comply with the applicable regulatory norms but also strives to contribute positively to the communities around its operation through various initiatives. The Company has planted around 37000 multi species plants during the year. The Company has a green belt cover of around 33% of its total land, which meets the norm set up by the Government. The new Administrative Building of the Company has been awarded with "LEED India Platinum Rating" by Indian Green Building Council.

Environment

Corporate Social Responsibility & Sustainability

a) Health and Sanitation:

The Company, through its unwavering support to the community over the past four decades, has not only helped to improve the quality of life but also helped to create a deeper connection with the community it serves. While the Company undertakes various need driven CSR initiatives in its identified thrust areas, such as, Health & Sanitation, Education, Employability etc., some of its flagship programmes include;

i) Under its programme "Jagruti – a toilet for every house", the Company continues to work together with the Govt. & an NGO to help construction regular toilets and bathrooms with 24 hours water supply in every rural house. During the year, 298 households were covered under the programme, thus taking the total number of beneficiaries till date to 1789.

ii) Another flagship programme under Health has been "Operation Khushi – correction of cleft lips and palates". The Company continues to work on correcting the congenital deformities of cleft lip and cleft palate cases drawn over

550 –

11

09-10

PAYMENT TO AND PROVISIONFOR EMPLOYEES

(` in Crores)

10-11 11-12 12-13

65 –

60 –

55 –

50 –

45 –

40 –

35 –

30 –

25 –

20 –

15 –

10 –

5 –

0 –13-14

TRL

from different parts of Odisha. During the year, 73 such cases were identified and successfully operated at the Company's hospital at Belpahar, which is accredited by the "Smile Train", an NGO in the USA. The total number of cleft lip & cleft palate corrections done so far now stands at 942.

iii) During the year, 10 number of Health Camps were organized at different places in the community and a total number of 3474 persons availed the benefits from these camps.

i) In order to help the rural schools to provide basic infrastructures and amenities to their students, the Company assists such schools by way of construction of class rooms, hostels, toilets etc., supply of bench & desks, beds for hostel, scientific apparatus, library books for schools etc. During the year, 1 hostel room and 2 toilets were constructed and 81 pairs of desks and benches & 130 MS beds were supplied. This support has benefited 9 schools and around 450 students.

ii) In order to provide the meritorious but poor students access to quality education, the Company provides scholarships to such students, who study in B. R. High School and Belpahar English Medium School every year under its Merit-cum-Means scholarship scheme. During the year, a total of 255 students were benefited from this scheme.

b) Education:

c) Employability:

Affirmative Action

i) Employment:

ii) Employability:

Recognizing the importance and need of providing "Skill Upgradation Training" to unemployed youth in the community to help them gainfully engaged, the Company has set up a full-fledged residential Training Institute in 2009 to not only impart training but also to provide post-training follow up support to help the trainees in getting either wage employed or self-employed. The Institute, named, Rural Self Employment Training Institute (RSETI) has so far trained more than 2800 youths in different marketable trades. The Institute also boasts of a very high settlement rate of 85%, i.e., 85% of its passed out trainees are gainfully engaged. Many of them have also started their own entrepreneurship ventures. State Bank of India is a co-sponsor in this programme. During the year under review, a total no. of 854 students passed out from the Institute. It is worthwhile to mention here that this initiative is adjudged as one of the best Employability Programmes amongst the Tata Group Companies.

The Company has drawn out an Affirmative Action Policy and commits to address the needs of the underprivileged section of the society, particularly the SC/ST communities, by undertaking various initiatives in the areas of Employment, Employability, Entrepreneurship and Education. The Company's Affirmative Action Initiatives during the year under review earned it the most prestigious "Jury Award" in the Tata Group. In fact, the Company is one out of only two companies amongst different Tata Group Companies, who were selected for this Award. The Affirmative Action initiatives undertaken by the Company include;

The Company follows the principle of "Positive Discrimination" towards candidates from SC/ST communities, subject to merit and performance being equal with others while recruiting / selecting candidates for direct and indirect employments / engagements. During the year, around 30% of total workmen recruited on the rolls of the Company were from SC/ST communities.

The Rural Self Employment Training Institute (RSETI), as mentioned above, has developed into a model Institute imparting skill development training to unemployed youths of the area. Out of the total trainees trained during the year in RSETI, around 50% belonged to SC/ST communities. It is heartening to note that, the settlement rate amongst SC/ST trainees on gainful engagement stands at more than 90%. During the year, out of the total trainees, who got gainfully engaged, around 60% were self-employed (including being entrepreneurs) and 40% were wage employed.

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iii) Entrepreneurship:

iv) Education:

United Nations Global Compact Compliance

Entrepreneurship development training forms a part of the training calendar of Rural Self Employment Training Institute (RSETI). Similarly, vocational training classes on sewing for ladies also have helped in developing entrepreneurs, who run their own tailoring shops and earn a decent livelihood. During the year, around 20 youths, both boys and girls, have started their own entrepreneurship ventures. Beside, the Company encourages and follows the principle of "positive discrimination" while selecting vendors in its supply chain provided quality, price and other considerations remaining equal with others. During the year under review, there were 7 SC/ST contractors handling together a total value of around 7 Crores worth of contracts.

During the year, 44 SC/ST students availed the Company sponsored merit-cum-means scholarship, 14 SC /ST students were given TRL scholarship for professional courses for school education. Besides, 2 SC/ST students were given financial support for pursuing their professional courses.

With an objective to ensure that no talent is denied opportunity to pursue his / her basic education, the company has instituted an "Ekalavya" Scheme. Under this scheme, bright but poor SC/ST students are selected from the rural schools from class V and are admitted to a good residential school with free lodging and boarding facilities upto class X. During the year, 2 SC/ST boys were selected and admitted in B. R. High School. At present, a total of 16 students are pursuing their studies in B. R. High School under this scheme.

The Company is committed to complying with the UN Global Compact principles. As an equal opportunity employer, it does not carry any bias against any person based on caste, religion, race, marital status, sex, disability etc. In fact, it strives to promote diversity at the workplace. It commits not to carry out any act which violates human rights. During the year, no case of violation of human rights has been reported. Energy conservation, environment protection and safety management are priority areas for the sustainability and growth of the Company. Accordingly, focused initiatives are taken in these areas to reduce generation of waste, promote recovery, recycle and reuse principle, reduce and contain pollution. A comprehensive focus has been created to take the overall safety management status to the next higher level in the Company. The Company, as a responsible corporate citizen, continues to undertake various projects / programmes in the identified areas of health, education, irrigation, employability, etc. Tata Code of Conduct serves as a Guide and drives ethical behavior across the organization and amongst all the stakeholders.

Industrial Relations

Directors' Responsibilities

Subsidiaries

The industrial relations in all the units and branches of the Company remained cordial and peaceful throughout the year. The Company has not lost even a single man-day in any of its manufacturing units.

To the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors make the following statements in terms of Section 217(2AA) of the Companies Act, 1956:

(a) that in the preparation of annual accounts for the year ended March 31, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any,

(b) that such accounting policies as mentioned in the Notes to the Accounts have been selected and applied consistently, and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2014, and of the profit of the Company for the year ended on that date,

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,

(d) the annual accounts have been prepared on a going concern basis.

The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards. The Ministry of Corporate Affairs, Government of India vide its Circular No.5/12/2007-CL -III dated

th8 February, 2011 has granted general exemption under Section 212(8) of the Companies Act, 1956, from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies to the balance sheet of the Company, provided certain conditions are fulfilled. Accordingly, annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary companies' investors seeking such information at any point of time. The annual accounts of the subsidiary companies will also be kept for inspection by any Investor at its Registered Office in Belpahar and that of the subsidiary companies concerned.

Details of major subsidiaries of the Company are covered in this Annual Report.

13

TRL

Directors

Mr. Yujiro Ueda and Mr. Kinji Matsushita relinquished the Directorship of the Company with effect from 19th April, 2013 and 30th April, 2014 respectively.

The Directors wish to place on record their warm appreciation of the valuable advice and support extended by Mr. Ueda and Mr. Matsushita during their tenure as Directors of the Company.

In the casual vacancy on the Board caused by the resignation of Mr. Yujiro Ueda, the Board appointed Mr. Akira Tsuneoka, nominated by Krosaki Harima Corporation, Japan, to fill the vacancy with effect from 8th May, 2013.

In the casual vacancy on the Board caused by the resignation of Mr. Kinji Matsushita, the Board appointed Mr. Koji Tsuyuguchi, nominated by Krosaki Harima Corporation, Japan, to fill the vacancy with effect from 12th May, 2014.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Rakesh Kulshreshtha, Mr. V. S. N. Murty and Mr. Kiyotaka Oshikawa are retiring by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.

Auditors

Energy, Technology, Foreign Exchange etc.

Particulars of Employees

M/s N.M. Raiji & Co., present Auditors of the Company, retire at the forthcoming Annual General Meeting and as per Section 139(2) of the Companies Act, 2013 are eligible for re-appointment for another three years. Pursuant to the provisions of Section 139 of the Companies Act, 2013, their re-appointment requires the approval of the members.

Particulars, pursuant to the provisions of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure -A.

As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employee) Rules, 1975, names and other particulars of employees of the Company who were in receipt of remuneration of not less than 60,00,000 during the year ended March 31, 2014 or ` 5,00,000 per month are set out in Annexure-B.

On behalf of the Board of Directors

Kolkata, May 12, 2014 H. M. NerurkarChairman

14


ANNEXURES TO DIRECTORS' REPORT

Particulars pursuant to the provisions of Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

(A) Conservation of Energy

(B) Technology Absorption

(C) Foreign Exchange earnings and outgo

Annexure – A

(a) Energy Conservation measures taken :

(i) Utilisation of undersized Coal 10-20 mm in Gas Producers has reduced the consumption of prime coal by 160Mt / Month.

(ii) Maximisation of Producer Gas firing in Fire Bricks Tunnel Kiln-1 & 2 with In-house designed gas burners & external combustion air arrangement was stabilised.

(iii) Pet coke feed rate in RTK-1 & 2 were increased to 600 Kg/Hr and 650 Kg/Hr respectively, to reduce consumption of furnace oil.

(iv) The new Tunnel Kiln is stabilised for firing FCPD products which will eliminate the use of HSD.

(v) Use of low viscosity Synthetic fuel to substitute Furnace Oil and HSD were introduced in HTK & DTK, to reduce firing cost.

(b) Additional investments or proposals, if any, being implemented for reduction of consumption of energy

(i) A parallel oil line is under modification for use of low viscosity fuel to substitute Furnace Oil in RTK.

(ii) Modification and relocation of Pet-Coke feed building in RTK-1 to increase Pet-Coke feed rate is under process.

(c) Impact of above measures:

(i) Prime Coal consumption reduced by 160Mt / month in Gas Producers thereby saving of rupees five lakhs per month is achieved.

(ii) Saving of rupees fifty lakhs per annum is achieved after the modification in FTK-1 & 2.

(iii) Saving of Rupees ten Lakhs per Annum will be achieved by firing FCPD Products in Tunnel Kiln.

(iv) Dolomite Brick firing cost is reduced by 175/Mt by using the Low viscous fuel in place of HSD.

Efforts made in technology absorption are given in form – B enclosed.

(a) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products & services and export plan : Mentioned in the Directors' Report

(b) Total foreign exchange used and earned:

Foreign Exchange used : ` 219 Crore

Foreign Exchange earned : ` 136 Crore

15

TRL

FORM-A

Previous Year

(a) Purchased

Units (M.kwh) 38.97

Total Amount ( Lakhs.) 2,024.73

Rate/Unit ( /kwh) 5.20

(b) Own Generation:

(i) Through Diesel Generator

Units (kwh) 191,720

Unit per Ltr. of Diesel Oil 2.35

Cost/Unit ( ) 19.96

(ii) Through Steam Turbine/Generator —

Quantity (Tonnes) 21,589

Total Cost ( Lakhs) 1,670.83

Average Rate ( / T.) 7,739

BELPAHAR : Quantity (KL) 16,776

Total Amount ( Lakhs) 6,993.78

Average Rate ( /KL) 41,689

PETROLEUM COKE : Quantity (Tonnes) 9,635

Total Amount ( Lakhs) 1,285.25

Average Rate ( /T) 13,339

Previous Year(Refractories Per Tonne)

Electricity (kwh/tonne) 215

Steam Coal-Grade "B" (Kg/tonne) 123

Petroleum Coke (Kg/tonne) 55

Furnace Oil, L.D.Oil (Litrs/tonne): 96

Form for Disclosure of Particulars with respect to Conservation of Energy

(A) Power & Fuel Consumption Current Year

1. ELECTRICITY

37.22

2,110.31

5.67

175,823

2.55

21.72

—

2. STEAM COAL GRADE "B" USED IN GAS PRODUCERS :

23,297

1,699.76

7,296

3. FURNACE OIL, L.D. OIL

14,503

6,236.28

43,000

4. OTHERS

8,087

1,144.59

14,153

(B) Consumption per unit of Production of the CompanyCurrent Year

234

152

53

95

`

`

`

`

`

`

`

`

`

16


FORM-B

New product development, quality improvement of existing products, process improvement for higher yields, use of reclaimed and alternate raw materials. Major emphasis was given to the research in the field of nano-materials, eco-innovations and development of products for Iron & Steel Sectors (like ASC bricks for Torpedo Ladle; repair materials for Converter & EAF etc.) and Non-Ferrous Metallurgical Industries like Copper, Aluminium, etc.

R&D works have helped in reducing the cost of raw material through redesign of products as well as improvement in yield. Sales through new and focused products during the year ending March 31, 2014 is 61Crores.

In the coming year, the R&D and Technology Division plan to focus on:

(i) Development of +Ve PLC Dolomite Bricks.

(ii) Development of Chrome-Corrundum Bricks for Coal Gassifier.

(iii) Development of Low Carbon MgO-C Bricks.

(iv) Development of Low Thermal Conductivity & High Abrasion Resistant LC Castable for Pellet Plant.

(v) Development of Improved Quality MgO-C for Steel Ladle.

(vi) Development of Repair Materials for Converter & EAF.

(vii) Research on use of Different Nano-Materials in Refractories.

(a) Capital : ` 10.54 Lakhs

(b) Recurring : ` 372.71 Lakhs

(c) Total : ` 383.25 Lakhs

(d) Total R&D Expenditure as a percentage of total turnover : 0.42 %

?Number of new products have been introduced in the product basket with in-house development as well as with technical know-how with Krosaki Harima Corporation, Japan. Taphole Clay, New generation Flow Control Products; MgO-C for EAF & Converter and Repair materials for Trough, Converter & EAF are developed with KHC technology. In-house developed materials are Spinel bricks for Steel Ladle; DBMC bricks; Basic bricks for Lime Kiln etc.

?Several successful trials of TRL Krosaki products have been carried out in the areas of Taphole Clay in large Blast Furnaces; new generation Flow Control Products in Steel Plants; MgO-C bricks in EAF & Converter; DBMC bricks in Copper industries etc. to promote and expand the business share in Domestic as well as International Business.

?Forty two number of new/improved products were introduced such as Tar & Resin bonded Taphole Clay for bigger Blast Furnaces in Tata Steel, JSW & ESSAR; Slide Plate (TRL MRX 220) in LD#2 & (TRL AZK2) in LD#1, Tata Steel; TRL Cast HC-H111B for RH Degasser application in Tata Steel; Cost-effective and low thermal conductivity Castable for Ladle & Tundish back up; Anti-sticking gunning material (TRL MHT-GT) for Converter application; Ladle Nozzle (TRL SN-SP10) in LD#3, Tata Steel; High performing castable for

Form for disclosure of particulars with respect to Technology Absorption

Research & Development

1. Specific areas in which R&D work was carried out by the Company

2. Benefits delivered as a result of R&D Programmes

3. Future plan of action

4. Expenditure of R&D

5. Technology absorption, adaptation and innovation:

(i) Efforts, in brief, made towards technology absorption, adaptation and innovations:

17

TRL

250 MW CFBC boiler of BHEL; TRL Patch-MC for hot patching of Converter; High performing PCPF items [TRL Flowcast CR-10 (PCPF)] for KCM, Zambia; TRL SLM#2 for Steel Ladle Metal Zone & Bottom; TRL Cord for Coke Oven Door; TRL Cral 10P for Pellet Plant; TRL ASC (Spl.) for Charge Pad and other areas of Torpedo Ladle; Improved quality of Mag-Dolo brick (TRL DoloB10K) for NSSC, Hikari Ladle in Japan; Magnesia-Alumina Spinel and Magnesia-Zirconia bricks for Lime Kiln having better Thermal Spalling and Hydration Resistance; DBMC products with cost-effective DBM; Dolomite bricks (TRL DoloF1) for Arcelor Mittal Acesita Plant, Brazil etc.

?Innovation in every field of business processes are given as the thrust area. Awareness programme at different levels are carried out through classroom as well as shop floor training. To enhance the customer focus targeting towards the supply of 'zero defect' products to the customers, a newly designed Quality Management System (QMS) has been implemented in the Plant. Eco-Innovative projects like Development of Low Carbon MgO-C Bricks; Development of value added products from waste materials; use of nano-materials in Refractories etc. have been taken up and lots of business is expected in the years to come. TRL Krosaki is working jointly with different Institutes/ Universities like National Institute of Technology, Rourkela; Central Glass & Ceramic Research Institute, Kolkata etc. on collaborative projects. Two joint projects with NIT, Rourkela are funded by the Department of Science & Technology, Govt. of India.

?The performance of the TRL's products has shown superiority at customers' end with record lives (e.g. the record high life of 6358 heats has been achieved in 160 MT Converter in in Vessel-B of LD#3, Tata Steel lined with MgO-C from TRL-C; highest lives of 94 and 133 heats (with one repair) are achieved at LD#3 & LD#2 Steel Ladle, Tata Steel respectively lined with MgO-C from TRL-C; the record high EAF life of 916 heats is achieved at SISCO lined with MgO-C bricks from TRL-C with the help of KHC; the highest AOD lives of 85 and 71 heats are achieved with TRLK Dolomite bricks at SMS-3, Viraj Profiles & Mittal Corporation, respectively; higher and consistent life in NSSC, Hikari Ladle, Japan with improved quality Magnesia-enriched Dolomite bricks; achieved highest life of 5 heats with Slide Plate (MRX-220) at LD#2, Tata Steel; cost-effective & high abrasion resistant Collector Nozzle in LD#1, Tata Steel; Trough Castable has given a record performance of 2.0 and 1.22 lakhs ton hot metal throughput at BF-1 of JSW and Blast Furnace 'C' of Tata Steel, respectively; establishment of the Technology of Taphole Clay manufacturing at Belpahar followed by superior performance of these products in large Blast Furnaces with different customers like Tata Steel, JSW, ESSAR, JSPL etc.

?Several successful trials of TRL Krosaki products have been carried out in the areas of Taphole Clay in large Blast Furnaces; new generation Flow Control Products in Steel Plants; MgO-C bricks in EAF & Converter; DBMC bricks in Copper industries etc. to promote and expand the business share in Domestic as well as International Business.

?Savings in raw materials costs, improvement in process yield, higher product performance at customers' end, increased customer satisfaction etc. are going on a continual basis.

Technology Year of Import Status of implementation

a) Taphole Clay – Krosaki Harima Corporation, Japan 2011-12 Under implementation

b) Flow Control Products (FCP) – Krosaki Harima Corporation, Japan 2011-12 Under implementation

c) RH Snorkel – Krosaki Harima Corporation, Japan 2011-12 Under implementation

d) Wear Lining Material for Trough & Runner – Krosaki Harima Corporation, Japan 2012-13 Under implementation

e) Repair Material – Krosaki Harima Corporation, Japan 2012-13 Under implementation

f) Manufacturing of Slide Gate Device –Krosaki Harima Corporation, Japan 2013-14 Under Implementation

ii) Benefits derived as a result of above efforts:

(iii) In case of imported technology (imported during the five years reckoned from the beginning of the financial year) following information may be furnished:

18


ANNEXURE-B

Name Designation and Gross Net Qualification Age Total Date of Particulars Nature of duties Remuneration Remuneration in Experience Commencement of last

` ` years Years of Employment Employment held

1 2 3 4 5 6 7 8 9

Chattopadhyay A. K. Managing Director 14,770,193 8,982,293 M. Tech 61 36 01.05.2002 Senior Vice President & (Chem. Tech), Chief Executive, Ph. D. (Tech) (Refractories Business),

Associated CementCompanies Limited

Das C.S. Executive Vice 7,427,679 4,467,307 B.Com, 55 32 01.04.1996 Controller of Accounts & President & Chief FCA, ACS Company Secretary, Finance Officer IPITATA Refractories Ltd.

(presently known as Nilachal Refractories Limited)

Panda P.B. Executive Vice 7,013,266 4,221,210 B.Sc. (Tech.) 55 32 17.10.1981 TRL China Ltd., President & Chief Ceramic Tech. President & CEOOperating Officer

Notes : 1. Gross Remuneration comprises Salary, allowances, monetary value of perquisites, commissions and the Company's contribution to Provident Fund and Superannuation Fund but excludes contribution to Gratuity Fund as separate figures are not available.

2. Net Remuneration is after tax and is exclusive of Company's contribution to Provident Fund and Superannuation Fund and monetary value of non- cash perquisites.

3. The nature of employment is contractual.

On behalf of the Board of Directors

Kolkata. May 12, 2014 (H. M. Nerurkar) Chairman

Statement pursuant to Section 217 (2A) of the Companies Act,1956 and the Companies (Particulars of Employees ) Rules, 1975

19

Percentage of refractoriesConsumption

TRL

MANAGEMENT DISCUSSION AND ANALYSIS

Economic Environment

Industry Overview

Performance Review

Despite improved global financial conditions and reduced short term risks, the world economy continues to expand at a subdued pace. Growth of World Gross Products (WGP) is now estimated at 2.1% for 2013 and forecasted to grow at a pace of 3% in 2014. While most developed economies continued to grapple with the challenge of taking appropriate fiscal and monetary policy actions in the aftermath of the financial crisis, a number of emerging economies, which had already experienced slowdown in the past two years, encountered new domestic and international headwinds during 2013.

The year 2013-14 was a challenging one for Indian economy. Economic growth declined further recording merely 4.8%, the lowest in the last decade. Inflation and high fiscal deficit in the current economic scenario are major concern. The rupee US dollar exchange rate fluctuated significantly, depreciating to all time low of ` 68.85 in August 2013. However, India's basic economic fundamental remains intact and growth is bound to bounce back in the year ahead. The World Bank has projected an economic growth rate of 5.7% in fiscal year 2014 for India.

Refractories are composite materials used in large volume in extreme, usually corrosive environments as furnace lining for high temperature materials processing and other applications in which thermo chemical properties are critical. Refractories are therefore, facilitating or enabling materials and are essential to successful operations of any industry in which high temperature is used. Industry-wise percentages of refractories consumption in India during the financial year 2013-14 are as follows:

As the steel industry is the major consumer of refractories, the growth of refractories industry is closely linked with the growth of iron and steel industry. Contraction of manufacturing sector's output by around 0.7% and dismal growth of steel consumption by around 0.6%, in India, in the year 2013-14 have adversely impacted the growth of refractories industry. The capacity utilization of refractories industry has been estimated to be around 65%.

Due to continuous slowdown in Indian Economy for last three consecutive years, there were negligible growth in consuming industries particularly iron and steel. New projects of iron and steel manufacturers were delayed or deferred.

With the surplus capacity in the refractories industry, the competitive intensity both in domestic and global markets has further increased, which has made prices of products un-remunerative.

The highlights of financial performance are as under:

S. No. Item 2013-14 2012-13 Change` ` Crores ` Crores (%)

1 Sale of Products and Services (including Excise Duty) 914 924 -1

2 Other Income 4 5 -23

3 Total Income (1+2) 918 929 -1

4 Manufacturing and other Expenses (including Excise Duty) 865 872 -1

5 Earning before interest, Depreciation and Taxes (EBIDTA) 53 57 -7

6 EBIDTA margin 5.74% 6.14% -

7 Depreciation 23 25 -6

8 Finance Cost 25 22 +13

9 Profit Before Tax 4 10 -59

10 Profit After Tax 3 7 -58

20


During the year, the Company suffered negative growth mainly due to lower capacity utilization of High Alumina, Basic, Dolomite and Monolithics facilities due to lower order booking owing to lower demand and fierce competition in the market. Some customers even after placing orders had not lifted the material due to delay in execution of their projects which had resulted increase in finished goods inventory of the Company for the major part of the year.

The tight monetary policy of RBI to curtail spiraling inflation, continued for the third consecutive year, for which borrowing cost remained very high.

Higher finance cost for the year at 25 Crores against 22 Crores of last year was attributable to additional borrowing done to finance working capital requirement and capital expenditure of the company. Borrowing for Capex increased to ` 82 Crores from ` 64 Crores of last year. Borrowing for working capital increased to ` 145 Crores from ` 138 Crores of last year. Total current assets increased by 33 Crores (` 430 Crores current year against 397 Crores of last year). Inventories increased by ` 30 Crores (` 201 Crores in current year against ` 171 Crores last year). Raw-material inventories increased primarily due to procurement of higher volume of raw-material to avail volume discount and due to lower production. Stock of finished products and WIP increased due to delay in lifting materials by customers owning to delay in execution of their projects.

Total debtors has increased to 191 Crores from 180 Crores of last year, primarily due to delay in receiving payments from some customers due to fund problem faced by them. Some customers are also delaying payment, as their projects have been delayed. Although, at present all refractories manufacturers are facing similar situation with respect to receivable, the company has initiated action to reduce receivable considerably.

Although, throughout the year, interest rate remained at a very high level, the average cost of borrowing contained at 10.5% for the year against 9.98% of the previous year by availing short term loan and discounting bills at a lower rate. Despite lower cash profit, the Company managed to ensure that funds are available to meet its operational and capital expenditure.

Keeping in view, estimated better performance during the year 2013-14, current gearing level, and unutilized credit limits, the Company is comfortable of managing its liquidity over the short term and medium term.

ICRA has assigned [ICRA]AA- (stable) (pronounced ICRA double A minus), rating to Fund Based Working Capital Limit and Term Loan and A1+ (pronounced A one Plus) rating to Non-fund Based Working Capital Limit and Short term Fund Based Working Capital Limit of the Company.

The Company's Human Resource focus for the year was on four key areas; strengthening capacity and capability of Technical Services function, enhancing individual and organisational readiness through focused training and development programme, driving greater employee awareness and engagement in Safety Management and promoting Affirmative Action by following the principle of "Positive Discrimination" in all recruitment processes.

The Company undertook intensive training programmes through a combination of class-room and positional learning approaches. Over 85% of its employees were covered under various training programmes with an overall training man-days on 10.1 man-days/man-year, which is an industry benchmark in the country.

During the year, the Company took a drive to build the capacity of its Technical Services function by recruiting experienced personnel at different levels. Similarly, a focused recruitment drive was undertaken to recruit employees against bulk retirement which has started to happen and will continue for another two years. During the year, around 30% of total recruitment done in the workmen cadre were from SC/ST communities, who were selected through the process of "positive discrimination".

Keeping in view negative growth in turnover and profit of the company for the second consecutive year, the Board of Directors of the Company have engaged The Boston Consulting Group (BCG) a world renowned consultancy firm to help the Company to formulate strategy and to streamline its operation to enhance both its top line and bottom line in the short – medium term. The BCG has started reviewing existing strategy and system of the Company and the Company is in the process of implementing some of their recommendations. BCG will complete the project by 30th September, 2014.

Company is continuing in up-gradation of quality of some products in association with Krosaki Harima Corporation, Japan. New Taphole Clay plant commenced commercial production during the year and the Company has sold 1,210 MT of Taphole Clay from the new plant. The Company has planned to enhance the capacity utilization of the plant during the financial year 2014-15 by stabilizing the performance of Taphole Clay in the plants of new customers. Construction of new Flow Control Products plant has been completed and the commercial production will start from the financial year 2014-15. After assessing the requirement of an advance version of Slide Gate Device for boosting sales of Flow Control Products, the Company has signed technical knowhow agreement with Krosaki Harima Corporation, Japan, for manufacturing of Slide Gate Device in its Belpahar plant.

The above strategy of the company is expected to improve its market presence and profitability.

Finance Cost and Liquidity

Human Resources

Business Strategy

21

TRL

Future outlook

Risks and Concerns

Internal Control Systems

Cautionary Statement

Global financial conditions have been stabilized in recent months, as new policy initiatives in developed economies, including a further expansion of unconventional monetary policies, reduced the near-term tail risks for the world economy. Foreign direct investment flow to emerging economies are also strengthened. The upward trend of private capital to emerging economies is likely to continue as significant growth and interest rate differentials will persist in the near term. The current environment of low global interest rates, moderate volatility and rising risk appetite among investors, poses, however, considerable risks for emerging economies.

Structural factors such as stubbornly high inflation, large fiscal deficits, political uncertainties and transport and energy constraints will keep economic growth of India and investment below potential. While India's growth is likely to have bottomed out, the recovery will be slower than previously expected.

Steel industry being the major consumer of refractories, holds key to the growth of refractories industry. Since last two years, several Iron and Steel projects have been stalled due to policy bottleneck, like obtaining environmental permissions, fuel linkages, mining permission or land acquisition. In the present political situation, it is unlikely that the situation would change very significantly in the next year or so.

The Company has adequate internal control systems and procedures in place commensurate with the size and nature of its business. The effectiveness of internal control is continuously monitored by the Internal Audit Department of the Company. The Internal Audit's main objective is to provide to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance of the adequacy and effectiveness of the organization's risk management, control and governance processes. Internal Audit also assesses opportunities for improvement in business processes, systems and controls and provides recommendations designed to add value to the Organization. Internal Audit also follows up on the implementation of corrective actions and improvements in business processes after review by the Audit Committee and Senior Management.

The scope and authority of the Internal Auditors are derived from the Audit Charter approved by the Board of Directors. The Company has an Audit Committee of directors with three non-executive directors. To ensure independence, the Chief of Internal Audit has a direct reporting line to the Chairman of the Audit Committee and only indirectly to the Managing Director. The Audit Committee meets the Company's Statutory Auditors in order to ascertain their observations on financial reports and on control concerns. The Audit Committee's observations and suggestions are acted upon by the Management.

Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimates and expectations are "forward-looking statements". Actual results can differ materially from those expressed or implied. Important factors that could make a difference to Company's operations include economic conditions affecting demand/supply, price conditions in the domestic and overseas markets, changes in Government regulations, tax laws and other statutory and incidental factors.

22


CORPORATE GOVERNANCE REPORT FOR THE YEAR 2013-14

1. The Company's Corporate Governance Philosophy

2. Board of Directors

TRL Krosaki Refractories Limited is not a Listed Company. Hence, the Corporate Governance norms are not statutorily mandatory for TRL Krosaki. However, your Company is committed to follow good corporate governance practices proactively. The Company emphasises the need for full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. The Board considers itself as a Trustee of its Shareholders and acknowledges its responsibilities towards them for creation and safeguarding their wealth. The Company believes that good corporate governance practices generate goodwill among business partners, customers and investors, earn respect from society, bring about a consistent sustainable growth and profitability for the Company and ensure competitive returns for the investors. The Corporate Governance philosophy has been strengthened with the implementation of Tata Business Excellence Model and the Code of Conduct applicable to the Company, its Directors and its Employees.

Profile –

Mr. Hemant Madhusudan Nerurkar was appointed as Chairman of the Board on August 27, 2011. A Bachelor of Technology in metallurgical engineering from the College of Engineering, Pune University. Mr. Nerurkar has attended several management courses in India and overseas, including CEDEP in France. Mr. Nerurkar has vast experience of over 35 years in Tata Steel in various positions. He joined Tata Steel in 1972 and rose to the level of Managing Director

stin-charge of India and South East Asia Operation and superannuated from services on 31 Oct' 2014.

Mr. Nerurkar has been conferred with several prestigious awards such as the 'Tata Gold Medal 2004', 'SMS Demag Excellence Award 2002', 'Steel 80's Award-1990', 'SAIL Gold Medal – 1989', 'Visveswaraya Award-1988', 'NMD Award-1987', 'CEO with HR Orientation Award-2010', 'Maxell Foundation & Maharashtra Corporate Excellence Award-2012' and has been honoured with "Melvin Jones Fellowship Award" from Lions Club International.

Dr. Arup Kumar Chattopadhyay joined the Company on 1st May, 2002 as Executive Director. He holds degrees in Master of Technology in Chemical Technology (specialization in Ceramic Technology) and Ph.D (Technology) - kinetics of dehydration and rehydration of aluminium silicate systems from Calcutta University. He has been appointed as Whole-time Director (designated as Executive Director) w.e.f. 10.5.2002. Prior to his appointment in the Company, Dr. Chattopadhyay, was Sr. Vice President & Chief Executive (Refractories Business) of ACC Refractories (A Division of Associated Cement Company Limited). Dr. Chattopadhyay has over 36 years of experience, encompassing all facets of management i.e. manufacturing of refractories, developing and implementing business strategy, productivity enhancement, financial management, restructuring etc. He was re-designated as Joint Managing Director of the Company with effect from 1st March 2008, and was elevated to the position of Managing Director with effect from 28th April 2009.

Mr. Vuppala Satyanarayana Murty joined the Company as Director on May 05, 2008. A graduate in Commerce and Member of the Institute of Chartered Accountants of India, Mr. Murty has over 34 Years of experience in the area of Finance and Accounts of Tata Steel. He is in the Board of various Tata Group Companies.

Mr. Akira Tsuneoka joined the Company as Director on May 08, 2013. A Master degree holder in Ferrous Metallurgy from Kyushu University. He has 26 years of experience in the area of steel making at Nippon Steel Corporation (Presently as Nippon Steel Sumitomo Metal Corporation) and about 10 years of experience in the area of Manufacturing and Technology at KHC.

Mr. Kotaro Kuroda joined the Company as Director on May 31, 2011. A Bachelor of Science and Master of Science from Kyushu University, Mr. Kuroda has over 30 years of experience in the area of Research & Development, and he has served as Plant Manager of Monolithic Refractories. He has over five years of experience in General Management of the Manufacturing Division of Krosaki Harima Corporation.

Mr. Hiroshi Odawara joined the Company as Director on May 31, 2011. A Bachelor of Economics from Nagasaki University in 1976, Mr.Odawara has over 35 years of experience in the area of Sales and Marketing at Krosaki Harima Corporation.

Mr. Kinji Matsushita joined the Company as Director on May 31, 2011. He holds degree in Mechanical Engineering from Waseda University in 1980. Mr. Matsushita has over 30 years of experience in manufacturing plant management and technical service.

Mr. Kiyotaka Oshikawa joined the Company as Director on May 31, 2011. A Bachelor of political Science and Economics from Waseda University. Mr. Oshikawa has 26 years of experience in the areas of Finance, Accounting and Corporate planning. He has served as auditor of several subsidiary companies of Krosaki Harima Corporation.

Mr. Rakesh Kulshreshtha joined the Company as Director on December 12, 2011. Mr. Kulshreshtha is a gold medalist in metallurgical engineering and has acquired additional qualifications in Industrial Engineering & Business Management and also a Black Belt in Six Sigma. During his 37 years of service in the Steel Industry, he has worked in different capacities in Operations, Marketing, International Trade, Production Planning & Control, Raw Materials & Logistics, Management Services and Total Quality Management & HR. Mr. Kulshreshtha has vast experience in Business Planning, Business Development, Mergers & Acquisitions, Joint Ventures, Information & Technology and Business Excellence . He has been instrumental in taking several new initiatives in SAIL such as Six Sigma, Knowledge Management, implementation of ERP System, Social Accountability Standard (SA 8000) and Balance Score Card. He is recipient of UNIDO fellowship and has been trained in premier Institutions in India and abroad.

Mr. Prem Shankar Shrivastava joined the Company as Director on October 26, 2012. He holds degree in Bachelor of Technology in Mechanical Engineering and Post Graduate Diploma in Materials Management. Mr. P. S. Shrivastava joined Steel Authority of India Limited (SAIL) in 1977 and presently working as Executive Director in the Chairman's Secretariat. During his 36 years of service in SAIL, he has worked in different capacities in Material Management, Inputs & Logistics Management and Production Planning & Control of the Integrated Steel Plant.

Mr. Sudhansu Pathak joined the Company as Director on May 08, 2014. A Bachelor of Engineering (Metallurgy) from PEC, Chandigarh in 1984 and PGDBM from XLRI, Jamshedpur in 1990. He has also completed the General Management Programme at CEDEP, France. He joined Tata steel as a Graduate Trainee in July, 1984 and presently hold the position of Vice President (Steel Manufacturing). He has over 28 years of rich experience in various capacities at Tata Steel.

The Company has a Non-Executive Chairman and all other Directors except the Managing Director are Non-Executive Directors (NEDs).

None of the Directors on the Board is a Member on more than 10 Board Committees (Audit Committees and Shareholders' Grievance Committees) and a Chairman of more than 5 Committees, across all the Companies in which he or she is a Director.

The names and categories of Directors on the Board, their attendance at Board Meetings during the year, and at the last Annual General Meeting, and also the number of Directorships and Committee Memberships held by them in other Companies are given below :

# Excludes Directorships in Private and Foreign Companies.

* Chairmanship/ Membership of Audit Committee and Shareholders' / Investors' Grievance Committee.

CORPORATE GOVERNANCE

Name Category No. of Board Whether attended No. of Directorships No. of Committee Meetings attended AGM held on in other Public Positions held in other

during 2013-14 September 21, Companies # Public Companies *2013 As on 31.03.2014 As on 31.03.2014

As Chairman As Director As Chairman As Member

Mr. H. M. Nerurkar Non-Independent 6 Yes Nil Nil Nil Nil(Chairman) Non-Executive Director

Mr. V.S.N. Murty - do - 7 Yes Nil 5 Nil 3

Mr. Sudhansu Pathak - do - 7 Yes Nil 2 Nil Nil

Mr. Kotaro Kuroda - do - 7 Yes Nil Nil Nil Nil

Mr. Hiroshi Odawara - do - 7 Yes Nil Nil Nil Nil

Mr. Kinji Matsushita - do - 7 Yes Nil Nil Nil Nil

Mr. Kiyotaka Oshikawa - do - 7 Yes Nil Nil Nil Nil

Mr. Akira Tsuneoka - do - 7 Yes Nil Nil Nil Nil

Mr. Rakesh Kulshreshtha - do - 7 Yes Nil 1 Nil Nil

Mr. P. S. Shrivastava - do - 5 Yes Nil Nil Nil Nil

Dr. A. K. Chattopadhyay Executive Director 7 Yes Nil Nil Nil Nil(Managing Director)

23

TRL

24


Seven Board Meetings were held during the financial year 2013-14 and the gap between two consecutive meetings did not exceed one hundred and twenty days.

The details of meetings attended by Directors are given below:

Date of Meeting Mr. H. M. Nerurkar Mr. V. S. N. Murty Mr. Sudhansu Pathak Mr. Kotaro Kuroda Mr. Hiroshi Odawara Mr. Kinji Matsushita

5th May, 2013 Yes Yes Yes Yes Yes Yes

26th July, 2013 No Yes Yes Yes Yes Yes

21st September, 2013 Yes Yes Yes Yes Yes Yes

28th October, 2013 Yes Yes Yes Yes Yes Yes

24th December, 2013 Yes Yes Yes Yes Yes Yes

28th January, 2014 Yes Yes Yes Yes Yes Yes

20th February, 2014 Yes Yes Yes Yes Yes Yes

Date of Meeting Mr. Kiyotaka Oshikawa Mr. Akira Tsuneoka Mr. Rakesh Kulshreshtha Mr. P. S. Shrivastava Dr. A. K. Chattopadhyay

5th May, 2013 Yes Yes Yes No Yes

26th July, 2013 Yes Yes Yes Yes Yes

21st September, 2013 Yes Yes Yes Yes Yes

28th October, 2013 Yes Yes Yes Yes Yes

24th December, 2013 Yes Yes Yes Yes Yes

28th January, 2014 Yes Yes Yes Yes Yes

20th February, 2014 Yes Yes Yes No Yes

Date of the Board Meetings in the ensuing year are decided well in advance and communicated to the Directors. The Agenda along with the explanatory notes are sent in advance to the Directors. Additional meetings of Board are held when deemed necessary by the Board.

The Board reviews compliance reports of all laws applicable to the Company. Steps are taken by the Company to rectify instances of non-compliance, if any.

The Company has constituted an Audit Committee of Directors under Section 292A of the Companies Act, 1956. The terms of reference of the Audit Committee are broadly as follows :

(a) To review compliance with internal control systems;

(b) To review the findings of the Internal Auditors relating to various functions of the Company;

(c) To hold periodic discussions with the Statutory Auditors and Internal Auditors of the Company concerning the accounts of the Company, internal control systems, scope of audit and observations of the Auditors/Internal Auditors;

(d) To review the quarterly, half-yearly and annual financial results of the Company before submission to the Board;

(e) To make recommendations to the Board on any matter relating to the financial management of the Company, including Statutory & Internal Audit Reports;

(f) Recommending the appointment of statutory auditors and fixation of their remuneration.

The Audit Committee may also review such matters as considered appropriate by it or referred to it by the Board.

The composition of the Audit Committee and the details of meetings attended by the Directors during the financial year 2013-14 are given below:

3. Audit Committee

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Five Meetings of the Audit Committee were held during the financial year 2013-14.

The composition of the Audit Committee and the details of meeting attended by the Directors are given below :

Date of Meeting Mr. V. S. N. Murty Mr. Kinji Matsushita Mr. Kiyotaka OshikawaChairman, Member, Member,

Non-Independent & Non-Independent & Non-Independent &Non-Executive Non-Executive Non-Executive

7th May, 2013 Yes Yes Yes

25th July, 2013 Yes Yes Yes

28th October, 2013 Yes Yes Yes

23rd December, 2013 Yes Yes Yes

28th January, 2014 Yes Yes Yes

Mr. V.S.N. Murty, Chairman of the Committee was present at the last Annual General Meeting held on 21st September, 2013.

The Audit Committee Meetings are attended by the Executive Vice President & CFO, General Manager (Internal Audit) and representative of Statutory Auditors are invited to the meetings. Other senior executives of the Company attended the meetings as and when required by the Committee. The Senior Company Secretary acts as the Secretary of the Audit Committee.

The Board has constituted a Remuneration & Governance Committee. The broad terms of reference of the Remuneration Committee are as follows:

(a) Review the performance of the Managing Director and the Whole-time Directors after considering Company's performance.

(b) Recommend to the Board the remuneration including salary, perquisites and commission / performance bonus to be paid to the Company's Managing Director and the Whole-time Directors.

(c) Finalize the perquisites packages of the Managing Director and the Whole-time Directors within the overall ceiling fixed by the Board.

(d) Recommend to the Board, retirement benefits to be paid to the retired Managing Director(s) / Whole time Director(s) under the Retirement Benefits Guidelines adopted by the Board.

(e) To deal with matters relating to induction of Directors and shareholders' grievances.

One Meeting of the Remuneration & Governance Committee was held during the financial year 2013-14.

The composition of the Remuneration & Governance Committee and the details of meeting attended by the Directors are given below :

Date of Meeting Mr. H. M. Nerurkar Mr. Kotaro Kuroda Mr. Hiroshi OdawaraChairman, Member, Member,

Non-Independent & Non-Independent & Non-Independent &Non-Executive Non-Executive Non-Executive

8th May, 2013 Yes Yes NA

The Company while deciding the remuneration packages of the senior management members takes into consideration the following items:

(a) Track Record of the Executives;

(b) Remuneration packages of managerial talent in different industries in general and in the Refractories Industry in particular;

(c) Company's Performance.

4. Remuneration & Governance Committee

Remuneration Policy

26


The annual variable pay of senior managers is linked to performance of the Company in general and their individual performance for the relevant year measured against Key Result Areas, which are aligned to the Company's objectives.

The Company pays remuneration by way of salary, perquisites and allowances (fixed component) and commission / performance linked remuneration (variable component) to Managing Director and the Whole-time Directors. Salary is paid within the range approved by the Shareholders. Annual increments, effective from 1st April each year, are recommended by the Remuneration Committee and are subsequently approved by the Board. The ceiling on perquisites and allowances as a percentage of salary is determined by the Board. Within the prescribed limits, the perquisites package is approved by the Remuneration Committee. Commission is calculated with reference to net profits of the Company in a particular financial year and is determined by the Board of Directors at the end of the financial year based on the recommendations of the Remuneration Committee. This is also subject to overall ceilings stipulated in Sections 198 and 309 of the Companies Act, 1956. In absence or inadequacy of profit, performance linked remuneration is considered within the overall ceiling of Schedule-XIII to the Companies Act, 1956.

The Non-Executive Directors (NEDs) are paid remuneration by way of Commission and Sitting Fees. In terms of shareholders' approval obtained at the Annual General Meeting held on September 15, 2012, the commission is paid at a rate not exceeding 1% per annum of the net profits of the Company (computed in accordance with Section 309(5) of the Companies Act, 1956) for a period of five years commencing from April 01, 2012. The logic for distribution of Commission amongst the NEDs is approved by the Board. The Commission is distributed broadly on the basis of Board Meetings and various Committee Meetings attended by the NEDs.

The Company paid Sitting Fees of 15,000/- per meeting to its NEDs, for attending Board and Committee Meetings.

(a) Non-Whole time Directors (` Lakhs)

S. No. Name of the Director Commission * Sitting Fees

1. Mr. H. M. Nerurkar 0.94 1.35

2. Mr. V. S. N. Murty 0.94 1.80

3. Mr. Sudhansu Pathak 0.39 1.05

4. Mr. Akira Tsuneoka 0.39 1.05

5. Mr. Hiroshi Odawara 0.50 1.35

6. Mr. Kotaro Kuroda 0.55 1.50

7. Mr. Kinji Matsushita 0.66 1.80

8. Mr. Kiyotaka Oshikawa 0.66 1.80

9. Mr. Rakesh Kulshreshtha 0.39 1.05

10. Mr. P. S. Shrivastava 0.27 0.75

Note: (a) * Payable in 2014-15.

(b) Amounts indicated against Mr. Akira Tsuneoka, Mr. Kutaro Kuroda, Mr. Hiroshi Odawara, Mr. Kinji Matsushita and Mr. Kiyotaka Oshikawa have been paid to Krosaki Harima Corporation, Japan.

(c) Amounts indicated against Mr. R. Kulshreshtha and Mr. P. S. Shrivastava have been paid to Steel Authority of India Limited.

(b) Managing Director

Name Salary Perquisites Performance Stock Options` lakhs & Bonus @

Allowances ` lakhs` lakhs

Dr. A. K. Chattopadhyay 42.48 62.15 64.00 Nil

@ Payable in 2014-15.

Details of remuneration for 2013-14

27

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Other than above, the Non-Executive Directors do not have any other pecuniary relationship or transactions with the Company during 2013-14.

Service Contract, Severance Fees and Notice Period

Period of Contract of MD : From 10.05.2013 to 09.05.2015.

The contract may be terminated by either party giving the other party six months' notice or the Company paying six months' salary in lieu thereof.

There is no separate provision for payment of severance fees.

In addition to the above Committees on Corporate Governance, the Board has also constituted an additional committee known as Committee of Board.

The Committee of Board (COB) was constituted on 10th October, 2003 and its terms of reference amongst its other functions is to periodically review (1) Business and Strategy, (2) Financial matters requiring special attention, (3) Long term financial projections and cash flow, (4) Capital expenditure programmes, (5) Organizational Structure. COB shall also periodically review Company's business plans, profit projections, ways and means position, etc.

Three Meetings of the Committee of Board (COB) were held during the financial year 2013-14.

The composition of the COB and the details of meeting attended by the Directors are given below.

Date of Meeting Mr. H. M. Nerurkar Mr. Kotaro Kuroda Mr. Hiroshi Odawara Dr. A. K. ChattopadhyayChairman, Member, Member, Member,

Non-Independent & Non-Independent & Non-Independent & Managing Director Non-Executive Non-Executive Non-Executive

5th May, 2013 Yes NA NA Yes

26th July, 2013 No Yes Yes Yes

21st Sept, 2013 Yes Yes Yes Yes

(a) Location and time, for last three Annual General Meetings (AGM):

Company's Financial Year Location Date & Time

2012-13 Belpahar, Jharsuguda, Orissa - 768 218 21st September, 2013 at 1.00 PM

2011-12 Belpahar, Jharsuguda, Orissa - 768 218 15th September, 2012 at 1.00 PM

2010-11 Belpahar, Jharsuguda, Orissa - 768 218 27th August, 2011 at 12.00 Noon

(b) No Extra-Ordinary General Meeting of shareholders was held during the year.

(c) Special Resolutions passed in previous three Annual General Meetings :

1. At the Annual General Meeting held on 21st September, 2013, Special Resolution for Re-appointment of Dr. A. K. Chattopadhyay as Managing Director for the period from 10th May, 2013 to 9th May, 2015 was passed unanimously.

2. At the last Annual General Meeting held on 15th September, 2012, Special Resolution for Commission to Directors other than the Managing Director and Whole-time Directors was passed unanimously.

3. At the Annual General Meeting held on 27th August, 2011, Special Resolution for Rectification of mistakes in the re-stated Articles of Association of the Company was passed unanimously.

The Board has received disclosures from key managerial personnel relating to financial and commercial transactions where they and/or their relatives have personal interest. There are no materially significant related party transactions, which have potential conflict with the interests of the Company at large.

5. Other Committees

6. General Body Meetings

7. Other Disclosures

28


8. General Shareholder Information

AGM: Date, time & venue - 6th September, 2014 at 1.00 PMTRL Krosaki Refractories LimitedAt: Belpahar, Dist: JharsugudaOdisha - 768218

Particulars of Directors seeking appointment / re-appointment are given in the explanatory statement to the Notice of the Annual General Meeting to be held on 6th September, 2014.

Address for correspondence

Sr. Company Secretary,TRL Krosaki Refractories LimitedCIN-U26921OR1958PLC000349PO: Belpahar - 768 218Dist: JharsugudaOdisha, INDIA

Phone : +91 6645 258417Fax : +91 6645 250243e-mail : [email protected]

Share Transfer System:

Share Transfers in physical form can be lodged with the Company at the above mentioned address. The transfers are normally processed within two weeks from the date of receipt if the documents are complete in all respects. Certain Directors and the Company Secretary are severally empowered to approve transfers.

Distribution of shareholding as on March 31, 2014

Number of Number of % of Number of % of Shares Slab Shareholders Shareholders Shares held Shares held

1-100 20 18.18 1578 0.01

101-500 25 22.73 8348 0.04

501-1000 16 14.55 15350 0.07

1001-5000 15 13.64 41500 0.20

5001-10000 6 5.45 43500 0.21

10001-100000 20 18.18 601640 2.88

Above 100000 8 7.27 20188084 96.59

Total : 110 100 20900000 100

Categories of shareholding as on March 31, 2014

Category of Shareholder Number of shares held % of share capital

Foreign Holdings 10659000 51.00

Government Companies 2203150 10.54

FIs, Insurance Companies & Banks 962500 4.61

Other Corporate Bodies 5817354 27.83

Mutual Funds Nil Nil

Directors & Relatives Nil Nil

Individual & Others 1257996 6.02

Total 20900000 100.00

29

TRL

Top ten shareholders of the Company as on March 31, 2014

Sr. No. Name of the Shareholders No. of Shares Held % of Holding

1 Krosaki Harima Corporation 10659000 51.00

2 Tata Steel Limited 4239360 20.28

3 Steel Authority of India Limited 2203150 10.54

4 Kalimati Investment Co. Limited 1324504 6.34

5 Life Insurance Corp. of India 962500 4.61

6 Rajkumar Satyanarayan Nevatia 465000 2.22

7 Her Highness Rajmata Gayatri Devi 184570 0.88

8 Mr. Ajay Kumar Kayan 150000 0.72

9 S. M. S. Investment Corp. Pvt. Limited 97490 0.47

10 Man-Made Fibers Pvt. Limited 75000 0.36

Dematerialisation of shares as on March 31, 2014

1,82,26,714 equity shares of the Company representing 87.21% of the Company's Share Capital is dematerialized as on 31st March, 2014.

Unclaimed Dividend-

lAll unclaimed /unpaid dividend amounts for the financial year 2005-06, have been transferred to Investor Education & Protection Fund and no claims will lie against the Company or the Fund in respect of the unclaimed amounts so transferred.

lThe unclaimed dividend declared in respect of the financial year 2006-07 declared on 29th September, 2007, can be claimed by the shareholders by 28th September, 2014.

Address for Correspondence : TRL Krosaki Refractories LimitedPO: Belpahar - 768 218, Dist: JharsugudaOdisha, INDIAPhone :+91 6645 258417, Fax :+91 6645 250243E-mail : [email protected]

Dividend History for the last 10 years

Financial Year Dividend Date Rate Financial Year Dividend Date Rate

2012-13 21.09.2013 10% 2007-08 02.08.2008 35%

2011-12 15.09.2012 35% 2006-07 29.09.2007 35%

2010-11 06.05.2011 158% 2005-06 26.08.2006 50%

2009-10 24.07.2010 55% 2004-05 27.08.2005 50%

2008-09 05.09.2009 50% 2003-04 28.08.2004 30%

Bank Details

Shareholders holding in the physical form are requested to notify/send the following to the Company to facilitate better servicing:-

(i) any change in their address / mandate / bank details, and

(ii) particulars of the bank account in which they wish their dividend to be credited, in case have not been furnished earlier.

Shareholders are advised that respective bank details and address as furnished by them or by Depositories to the Company, for shares held in the physical form and in the dematerialised form respectively, will be printed on their dividend warrants as a measure of protection against fraudulent encashment.

9. Other information to the Shareholders

30


Nomination Facility

Shareholders who hold shares in the physical form and wish to make/change a nomination in respect of their shares in the Company, as permitted under Section 109A of the Companies Act, 1956, may submit to the Company the prescribed Form 2B.

Shares held in Electronic Form

Shareholders holding shares in electronic form may please note that:

lInstruction regarding bank details which they wish to have incorporated in future dividend warrants must be submitted to their Depository Participants (DP). As per the regulations of Depositories, the Company is obliged to print bank details on the dividend warrants, as furnished by the Depository to the Company.

lInstructions already given by them for shares held in physical form will not be automatically applicable to the dividend paid on shares held in electronic form.

lInstructions regarding change of address, nomination and power of attorney should be given directly to their respective DP.

National - Electronic Clearing Service (NECS) Facility

As per RBI notification, with effect from 1st October, 2009, the remittance of dividend through Electronic Credit Service (ECS) is replaced by National Electronic Clearing Service (NECS). Shareholders were requested by the Company to intimate their Folio No(s), Name and Branch of the Bank in which they wish to receive the dividend, the Bank Account type, Bank Account Number allotted by their banks after implementation of Core Banking Solutions (CBS) and the IFS Code / 9 digit MICR Code Number.

Shareholders who have already intimated the above information to the Depository Participants (DPs) / the Company need not take any further action in this regard.

Shareholders who have not intimated the DPs / the Company are requested to intimate the above information in respect of shares held in electronic form to the DPs and in respect of shares held in physical form, to the Company.

Those Shareholders who do not wish to avail of the NECS facility, are requested to furnish to the DPs/the Company, the name and Branch of the Bank and the Bank Account Number allotted by their banks after implementation of Core Banking Solutions, which will be printed on the warrants.

INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OF TRL KROSAKI REFRACTORIES LIMITED

1. Report on the Financial Statements

We have audited the accompanying financial statements of TRL Krosaki Refractories Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial

statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) In the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order, 2003 ("the Order") issued by the Central Government of India, in terms of sub-section (4A)of section 227 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the Order.

2) As required by section 227(3) of the Act, we report that:

(i) We have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the purpose of our audit;

(ii) In our opinion proper books of account, as required by law, have been kept by the Company, so far as appears from our examination of those books;

(iii) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For N. M. Raiji and Co.Chartered Accountants

Firm's Registration Number: 108296W

Vinay D. BalsePlace : Mumbai PartnerDated : May 12, 2014 Membership Number: 39434

31

TRL

32


ANNEXURE TO THE AUDITORS' REPORTOF TRL KROSAKI REFRACTORIES LIMITED

(Referred to in Paragraph 5 sub-paragraph 1 of our Report of even date)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets.

(b) In accordance with the phased programme for verification of fixed assets, certain items of fixed assets were physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, so as to affect the going concern assumption.

(ii) (a) Stocks of inventories have been physically verified during the year by the management. The Company has a perpetual inventory system. In our opinion, the frequency of such verification is reasonable. In respect of stocks lying with third parties, related confirmations have been obtained by the Company.

(b) The procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stock and the book stock were not material in relation to the operations of the Company and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, clause 3(b), (c), (d), (e), (f) and (g) of the Order are not applicable to the Company.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control systems, commensurate with the size of the Company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

(v) (a) In our opinion and according to the information and explanations given to us, particulars of contracts or arrangements that need to be entered into the register, in pursuance of Section 301 of the Companies Act, 1956, have been entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of rupees five lakhs, in respect of any party during the year, have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A, Section 58AA or any other relevant provisions of the Companies Act, 1956, and the rules framed thereunder, with regard to deposits accepted from the public. There have been no proceedings before the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this matter.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

(viii)

(a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other dues, during the year, with the appropriate authorities.

(b) According to the information and explanations given to us, and on the basis of our examination of the books of account, no undisputed amounts payable in respect of Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess, were in arrears, as at March 31, 2014, for a period of more than six months from the date they became payable.

We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts have been made and maintained.

(ix)

33

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(c) According to the information and explanations given to us, following are the dues of Income-tax, Sales-tax, Excise Duty, Holding Tax, Provident Fund and Cess which have not been deposited on account of disputes with the related authorities:

Sl. No. Nature of the Forum where dispute is Financial year to which AmountStatute Pending the matter pertains (` In Lakhs)

1 Income Tax Commissioner 2009-10 402.72

2 Central Excise CESTAT 2003-04 to 2010-11 (Apr 03 to Sep 10) 155.31

3 Service Tax CESTAT 2005-06 to 2008-09 20.14

4 Central Excise Commissioner Oct 10 to Jan 11 9.62

5 Sales Tax Hon'ble High Court of Odisha 1987-88, 1988-89 & 1994-95 150.96

6 Sales Tax Commissioner 1986-87 to 1988-89 2.00

7 Sales Tax Additional Commissioner 2005-06, 2006-07, 2007-08 & 2008-09 236.52

8 Sales Tax Tribunal 2007-08 2.39

9 Sales Tax Joint Commissioner 2009-10 8.43

10 Sales Tax Deputy Commissioner 1990-91, 1994-95 & 1995-96 4.93

Grand Total 993.02

(x)

In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. The Company does not have any outstanding debentures.

(xii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security, by way of pledge of shares, debentures and other securities.

(xiii) To the best of our knowledge and belief and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

(xiv) To the best of our knowledge and belief and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the Company.

(xv)

The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the financial year immediately preceding the financial year.

(xi)

In respect of a Corporate Guarantee given by the Company on behalf of its subsidiary, to a Bank, the terms and conditions thereof are not prejudicial to the interests of the Company.

(xvi) According to the information and explanations given to us, term loans availed by the Company have been used for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term investments.

(xviii) To the best of our knowledge and according to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year. As such, no security or charge has been created.

(xx) The Company has not raised any money during the year by way of public issue.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.

For N. M. Raiji and Co.Chartered Accountants

Firm's Registration Number: 108296W

Vinay D. Balse

Place : Mumbai Partner

Dated : May 12, 2014 Membership Number: 39434


BALANCE SHEET AS AT 31ST MARCH, 2014

01 20,90,00,000

02 252,50,26,262

273,40,26,262

03 56,94,78,989

9,58,95,088

04 20,86,62,274

87,40,36,351

03 138,31,12,288

05 163,39,20,722

05 50,25,05,390

04 12,63,12,660

364,58,51,060

725,39,13,673

06 160,53,35,855

06 69,82,24,142

06 6,61,36,448

06 –

236,96,96,445

07 33,66,47,325

08 24,15,48,701

294,78,92,471

10 200,75,33,956

09 190,87,63,273

11 8,05,65,323

08 29,43,70,394

09 1,47,88,256

430,60,21,202

725,39,13,673

18

(I) EQUITY AND LIABILITIES

(1) Shareholders' Funds

(a) Share Capital 20,90,00,000

(b) Reserves and Surplus 252,05,67,185

272,95,67,185

(2) Non-Current Liabilities

(a) Long-term Borrowings 49,29,96,664

(b) Deferred tax Liabilities (net) 10,86,46,598

(c) Long-term Provisions 21,89,77,112

82,06,20,374

(3) Current Liabilities

(a) Short-term Borrowings 131,76,65,695

(b) Trade Payables 119,13,08,458

(c) Other Current Liabilities 42,11,29,757

(d) Short-term Provisions 13,04,88,466

306,05,92,376

TOTAL EQUITY AND LIABILITIES 661,07,79,935

(II) ASSETS

(1) Non-Current Assets

(a) Fixed Assets

(i) Tangible Assets 162,42,88,788

(ii) Capital work-in-progress 37,83,42,358

(iii) Intangible Assets 5,57,84,587

(iv) Intangible Assets under development 78,80,231

206,62,95,964

(b) Non-current Investments 33,66,47,325

(c) Long-term Loans and Advances 23,65,65,272

263,95,08,561

(2) Current Assets

(a) Inventories 170,93,98,493

(b) Trade Receivables 179,64,12,481

(c) Cash and Cash Equivalents 14,32,23,117

(d) Short-term Loans and Advances 31,82,63,765

(e) Other Current Assets 39,73,518

397,12,71,374

TOTAL ASSETS 661,07,79,935

Contingent Liabilities ( refer Point No. 2 of Note 18 )Notes on Balance Sheet and Statement of Profit & Loss

As per our report annexed. For and on behalf of the Board

For N. M. Raiji & Co. H. M. Nerurkar ChairmanChartered AccountantsFirm Registration No:108296W A. K. Chattopadhyay Managing Director

Vinay D. BalsePartner C. S. Das EVP & CFOMembership No. 39434

A. Debta Sr. Company SecretaryDate : May 12, 2014Place : Mumbai Kolkata, May 12, 2014

34

As at 31.03.2013

Note ` `

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2014

12 913,97,88,679

63,39,21,166

850,58,67,513

13 3,55,88,754

854,14,56,267

14 326,64,00,966

194,61,85,824

(29,65,86,283)

15 58,96,89,952

16 25,25,97,923

23,42,64,544

17 255,93,79,630

855,19,32,556

(5,02,35,811)

850,16,96,745

3,97,59,522

2 ,36,00,000

(1,27,51,510)

1,08,48,490

2,89,11,032

1.38

18

I REVENUE

Revenue from Operations 924,27,67,313

Less: Excise duty recovered on Sales 65,43,70,581

858,83,96,732

II Other Income 4,61,21,096

III Total Revenue (I + II) 86 3,45,17,828

IV EXPENSES

(a) Raw Materials Consumed 323,04,79,400

(b) Purchases of finished, semi-finished and other products 156,02,90,596

(c) Changes in stock of finished goods, work-in-progress and stock-in-trade (4,36,65,083)

(d) Employee Benefit Expenses 62,25,14,336

(e) Finance Costs 22,38,17,391

(f) Depreciation 24,81,58,311

(g) Other Expenses 278,38,73,549

862,54,68,500

(h) Less: Expenditure (other than interest) capitalised (8,75,57,629)

Total Expenses (IV) 85 3,79,10,871

V Profit before tax (III - IV) 9,66,06,957

VI Tax Expense :

(1) Current tax 6,16,00,000

(2) Deferred tax (3,41,79,816)

Total Tax Expense 2,74,20,184

VII Profit after tax (V-VI) 6,91,86,773

Earnings per equity share:

Basic / Diluted 3.31

Notes on Balance Sheet and Statement of Profit & Loss





35

TRL

Apr'12 to Mar'13Note ` `

Previous Year

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2014

` Lakhs

397.60

2,342.65

(0.28)

(2.84)

(23.99)

2,525.98

2.23

4,843.75

5,241.35

(921.24)

(2,981.36)

4,011.56

108.96

5,350.31

(360.08)

4,990.23

(5,382.39)

8.58

(61.37)

25.06

0.28

(5,409.84)

33,583.64

(31,036.46)

(2,509.63)

(244.52)

(206.97)

(626.58)

1432.23

805.65

Previous YearApril '12 to March '13

` LakhsA. Cash Flow from Operating Activities:

Profit before Tax and Extraordinary Items 966.07

Adjustments for :

Depreciation 2,481.58

Dividend Income (8.01)

Profit on sale of assets (13.41)

Interest Income (33.59)

Interest Expenses 2,238.17

Provision for Wealth Tax 0.90

4,665.64

Operating Profit before Working Capital changes 5,631.71

Adjustments for :

Trade and Other Receivables 525.12

Inventories (1,040.94)

Trade Payables and Other Liabilities (365.90)

(881.72)

Cash Generated from Operations 4,749.99

Direct tax paid (net of refunds) (695.93)

Net Cash from Operating Activities: …..A 4,054.06

B. Cash Flow from Investing Activities:

Purchase of Fixed Assets (4,325.29)

Sale of Fixed Assets 44.66

Net movement in Creditors for Capital Goods 88.56

Interest Received 32.56

Dividend Received 8.01

Net Cash used in Investing Activities: ..….B (4,151.50)

C. Cash Flow from Financing Activities:

Proceeds from borrowings 37,791.78

Repayment of borrowings (34,770.69)

Interest paid (2,232.77)

Dividend paid (850.17)

Net Cash used in Financing Activities: …….C (61.85)

Net increase/(decrease) in cash and cash equivalents (A+B+C) (159.29)

Cash and Cash equivalents as at 1st April, 2013(Opening Balance) 1591.52

Cash and Cash equivalents as at 31st March , 2014 1432.23(Closing Balance)

Note: i) Figures in brackets represent outflows.ii) Previous year figures have been recasted / restated wherever necessary.





36


TRL

37

TRL

NOTES FORMING PART OF BALANCE SHEET

NOTE 01 As at 31.03.2014SHARE CAPITAL `

25,00,00,000

25,00,00,000

20,90,00,000

20,90,00,000

20,90,00,000

20,90,00,000

As at 31.03.2014

Number of ` Shares

2,09,00,000 20,90,00,000

As at 31.03.2014

Number of % of holdingShares held

1,06,59,000 51.00

42,39,360 20.28

22,03,150 10.54

13,24,504 6.34

As at 31.03.2013`

Authorised :

2,50,00,000 Equity Shares of ` 10 each 25,00,00,000

25,00,00,000

Issued :

2,09,00,000 Equity Shares of ` 10 each 20,90,00,000

20,90,00,000

Subscribed and Paid-up :

2,09,00,000 (2,09,00,000) Equity Shares of ` 10 each, fully paid-up 20,90,00,000

Total Share Capital 20,90,00,000

Out of the above :

a) 15,00,000 Shares of ` 10 each were allotted as fully paid-up bonus shares by capitalisation of General Reserve in the financial year 1977-78

b) Reconciliation of Shares

As at 01.04.2013

Number of `Shares

Equity Shares as at the beginning and end of the year 2,09,00,000 20,90,00,000

c) Share holders holding more than 5% shares

As at 31.03.2013

Name of the Share holders Number of % of holdingShares held

Krosaki Harima Corporation - Japan 1,06,59,000 51.00

Tata Steel Limited 42,39,360 20.28

Steel Authority of India Limited 22,03,150 10.54

Kalimati Investment Company Limited 13,24,504 6.34

38


NOTES FORMING PART OF BALANCE SHEETNOTE 02 As at 31.03.2014

RESERVES AND SURPLUS `

76,23,192

75,73,04,560

135,57,30,232

–

135,57,30,232

2,89,11,032

39,99,09,201

42,88,20,233

2,09,00,000

35,51,955

–

40,43,68,278

252,50,26,262

As at 31.03.2013

`(a) Capital Reserve

Balance as per last account 76,23,192

(b) Securities Premium Reserve

Balance as per last account 75,73,04,560

(c) General Reserve


Add : Amount transferred from Statement of Profit & Loss 20,00,000

135,57,30,232

(d) Statement of Profit and Loss :

Profit after tax 6,91,86,773

Add: Statement of Profit and Loss balance

brought forward from last year 35,71,74,383

42,63,61,156

Less:- Appropriations

(1) Proposed Dividend 2,09,00,000

(2) Corporate Dividend Tax 35,51,955

(3) Transfer to General Reserve 20,00,000

39,99,09,201

Total Reserves and Surplus 252,05,67,185

39

TRL


As at 31.03.2014

Long Current Short TotalTerm maturities of Term

Long-term * ` ` ` `

NOTE 03

1,68,64,991 3,40,00,000 – 5,08,64,991

– – 91,31,12,288 91,31,12,288

1,68,64,991 3,40,00,000 91,31,12,288 96,39,77,279

49,74,99,998 27,66,66,667 – 77,41,66,665

– – 47,00,00,000 47,00,00,000

5,51,14,000 74,10,000 – 6,25,24,000

– 46,597 – 46,597

55,26,13,998 28,41,23,264 47,00,00,000 130,67,37,262

56,94,78,989 31,81,23,264 138,31,12,288 227,07,14,541

As at 31.03.2013

Long Current Short TotalTerm maturities of Term

Long-term * ` ` ` `

BORROWINGS

A. Secured Borrowings

(a) Term Loans

- From Banks

State Bank of India 5,10,00,000 3,40,00,000 – 8,50,00,000(Refer 1 below)

(b) Repayable on Demand

- From Banks – – 84,76,65,695 84,76,65,695(Refer 2 below)

Total Secured Borrowings 5,10,00,000 3,40,00,000 84,76,65,695 93,26,65,695

B. Unsecured Borrowings

(a) Term Loans

From Mizuho Bank Ltd 39,41,66,664 15,58,33,336 55,00,00,000(Refer 3 below)

(b) Short Term Loans

From Banks – - 47,00,00,000 47,00,00,000

(c) Fixed Deposits 4,78,30,000 1,54,52,000 – 6,32,82,000

(d) Interest accrued and due thereon – 62,952 – 62,952

Total Unsecured Borrowings 44,19,96,664 17,13,48,288 47,00,00,000 108,33,44,952

Total Borrowings 49,29,96,664 20,53,48,288 131,76,65,695 201,60,10,647

* Current maturities of long-term borrowings will be reported as a part of Other Current Liabilities.

1) Secured by charge over Plant and Machinery , other equipments and fixed assets at the Company's existing plant site at Belpahar (Odisha) and repayable in 20 equal quarterly instalments. The next installment is due on 30th June, 2014.

2) Secured by hypothecation of current assets, both present and future, by way of pari-passu first charge and second charge over fixed assets.

3) Secured by Corporate Guarantee of Krosaki Harima Corporation, Japan, repayable in 12 quarterly instalments . The next installment is due on 30th June, 2014.

40



As at 31.03.2014

Long Short Total Term Term

NOTE 04 ` ` `

16,83,54,380 8,23,86,220 25,07,40,600

1,30,80,922 43,04,337 1,73,85,259

– 1,51,70,148 1,51,70,148

– 2,09,00,000 2,09,00,000

– 35,51,955 35,51,955

2,72,26,972 – 2,72,26,972

20,86,62,274 12,63,12,660 33,49,74,934

As at 31.03.2014NOTE 05 `

134,08,32,708

3,92,50,353

25,38,37,661

163,39,20,722

31,80,76,667

1,41,73,886

46,597

61,51,729

1,30,000

8,08,19,481

8,31,07,030

50,25,05,390

213,64,26,112

As at 31.03.2013

Long Short Total Term Term

` ` `

PROVISIONS

(a) Provision for Employee Benefits 17,98,15,600 8,54,50,927 26,52,66,527

(b) Provision for Employee SeparationCompensation 1,40,80,509 54,15,436 1,94,95,945

(c) Provision for Tax – 1,51,70,148 1,51,70,148

(d) Proposed Dividend – 2,09,00,000 2,09,00,000

(e) Corporate Dividend Tax – 35,51,955 35,51,955

(f) Other Provisions 2,50,81,003 – 2,50,81,003

Total Provisions 21,89,77,112 13,04,88,466 34,94,65,578

As at 31.03.2013`

TRADE AND OTHER PAYABLESCurrent LiabilitiesI) Trade Payables

a) Creditors for Supplies / Services 93,26,84,045

b) Creditors for accrued wages and salaries 4,25,36,989

c) Acceptances 21,60,87,424

( I ) Total Trade Payables 119,13,08,458

( II ) Other Current Liabilities

a) Current Maturities of long-term debt 20,52,85,336

b) Interest accrued but not due on borrowings 1,25,23,158

c) Interest accrued and due on borrowings 62,952

d) Unpaid Dividends 59,59,589

e) Unpaid Matured Deposits 4,15,000

f) Advances received from customers 11,95,24,284

g) Creditors for Other Liabilities 7,73,59,438

( II ) Total Other Current Liabilities 42,11,29,757

( III ) Total Trade and Other Payables 161,24,38,215

41

TRL

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8,9

3,6

4,3

38

—

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11)

—

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4,5

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14 60,6

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5,8

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(–)

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3.

Pla

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320,4

8,5

9,5

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12,1

4,6

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55,2

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11,9

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8,8

0,2

31

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2

36

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5 (2

06

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4)

42



No. of equity shares As at 31.03.2014 As at 31.03.2013of Face Value of Non-current Non-current ` 10 each fullypaid-up unless

NOTE 07 otherwise specified ` `

TRL

INVESTMENTS

1,14,34,254 32,88,38,325

77,990 77,99,000

1,44,202 18,42,020

(18,42,020)

5,000 10,000

8,000 8,00,000

33,66,47,325

10,000

37,44,000

33,66,37,325

A Trade Investments (At Cost)

Equity Shares (Unquoted)

1) Investment in Subsidiary Company

TRL Asia Private Limited 32,88,38,325( Face value of SG$ 1 each)

2) Investment in Associate Company

Almora Magnesite Limited 77,99,000

B Other than Trade Investments (At Cost)

Equity Shares ( Quoted )

Investment in Other Companies

a) Tata Construction and Projects Limited 18,42,020

Less : Provision for permanent diminution in (18,42,020)value of investment

b) HDFC Bank Limited 10,000(Face Value of 2 each)

Debentures (Quotation not available)

Other Instruments (Unquoted)

Tata Construction and Projects Limited

(10% Secured Debentures - 8,00,000Face Value of 100 each)

Less : Provision for permanent diminution in (8,00,000) (8,00,000) value of investment

Total Investments 33,66,47,325

Quoted Investments:

- Cost (Net of provision for diminution) 10,000

- Market Value 31,20,500

Unquoted Investments:

- Cost (including Quoted Investments in respectof which quotation is not available ) 33,66,37,325

`

`

43

NOTES FORMING PART OF BALANCE SHEETAs at 31.03.2014 As at 31.03.2013

Long Short Total Long Short TotalTerm Term Term Term

NOTE 08 ` ` ` ` ` `

As at 31.03.2014

As at 31.03.2014

As at 31.03.2013

As at 31.03.2013

NOTE 09 `

`

`

`

TRADE RECEIVABLES AND OTHER ASSETS

NOTE 10

TRL

LOANS AND ADVANCES

(a) Capital Advances 2,01,88,670 — 2,01,88,670

(b) Security Deposits 3,18,72,020 — 3,18,72,020

(c) Advances with public bodies 12,33,84,259 14,50,65,365 26,84,49,624

(d) Advance payment of Income—tax (net of provisions ) 6,11,20,323 — 6,11,20,323

(e) Other Loans and Advances — 17,46,79,919 17,46,79,919

Gross Loans and Advances 23,65,65,272 31,97,45,284 55,63,10,556

Less: Provision for Bad & Doubtful Loans & Advances

(a) On Other Loans and Advances — 14,81,519 14,81,519

Total Provision for Bad & Doubtful Loans & Advances — 14,81,519 14,81,519

Total Loans and Advances 23,65,65,272 31,82,63,765 55,48,29,037

32,83,053 — 32,83,053

3,18,75,580 — 3,18,75,580

13,30,31,022 16,15,78,889 29,46,09,911

7,33,59,046 — 7,33,59,046

— 13,43,26,420 13,43,26,420

24,15,48,701 29,59,05,309 53,74,54,010

— 15,34,915 15,34,915

15,34,915 15,34,915

24,15,48,701 29,43,70,394 53,59,19,095

—

(A) Current Trade Receivable and Other Assets

(a) Current Trade Receivables

(i) More than six months 62,23,69,968

(ii) Others 117,75,07,739

Gross Current Trade Receivables 179,98,77,707

Less: Provision for bad and doubtful debts 34,65,226

Net Current Trade Receivables 179,64,12,481

(b) Other Current Assets

(i) Income accrued on Deposits 1,14,244

(ii) Other Current Assets 38,59,274

Total Other Current Assets 3,973,518

60,74,79,359

130,70,53,402

191,45,32,761

57,69,488

190,87,63,273

7,368

1 ,47,80,888

1 ,47,88,256

INVENTORIES

77,76,68,771

35,42,63,317

57,63,60,026

12,44,65,482

11,34,60,728

38,43,267

5,74,72,365

200,75,33,956

(a) Raw Materials 75,73,80,445(including purchased raw materials-in-transit at cost)

(b) Work-in-progress (at cost) 23,07,43,069

(c) Finished Goods produced by the company ( at lower of cost or net realisable value) 45,50,71,675

(d) Stock-in-trade of goods acquired for trading (at lower of cost or net realisable value) (including purchased goods - in - transit) 7,26,87,798

(e) Stores and Spares (at cost) 12,25,44,099

(f) Loose Tools (at cost) 30,19,643

(g) Fuel (at cost) 6,79,51,764

Total Inventories 170,93,98,493

44



As at 31.03.2014 As at 31.03.2013NOTE 11 ` `

NOTES FORMING PART OF STATEMENT OF PROFIT AND LOSS

Previous YearApril’13 to March’14

Current YearApril’12 to March’13

NOTE 12 ` `

NOTE 13

OTHER INCOME

NOTE 14

TRL

CASH AND CASH EQUIVALENTS

1,17,455

15,65,550

7,26,48,589

82,000

61,51,729

8,05,65,323

(a) Cash in hand 2,21,447

(b) Cheques, drafts in hand 62,28,147

(c) Balances with Banks :

(i) In Current Account 12,95,25,934

(ii) In Deposit Account 12,88,000

(iii) for Dividend Payment 59,59,589

Total Cash and Cash Equivalents 14,32,23,117

REVENUE FROM OPERATIONS

(a) Sale of Products ( including Excise Duty ) 872,92,30,936

(b) Income from Sale of Services 38,13,29,042

(c) Other Operating Income 13,22,07,335

Total Revenue from Operations 924,27,67,313

868,11,65,107

27,34,73,723

18,51,49,849

913,97,88,679

(a) Interest received on sundry advances and deposits ( Gross ) 33,59,275

(b) Dividend Income 8,01,400

(c) Profit on sale of capital assets 13,41,381

(d) Credit Balances / Provisions no longer required written back ( Net ) 4,06,19,040

Total Other Income 4,61,21,096

23,98,795

27,500

2,83,858

3 ,28,78,601

3,55,88,754

RAW MATERIAL CONSUMED

75,73,80,445

328,66,89,292

404,40,69,737

77,76,68,771

326,64,00,966

Opening Stock 73,37,77,569

Add: Purchases 325,40,82,276

398,78,59,845

Less:Closing Stock 75,73,80,445

Cost of Material Consumed 323,04,79,400

45


Previous YearApril’13 to March’14 April’12 to March’13

` `

TRL

NOTE 15

EMPLOYEE BENEFIT EXPENSES

48,94,23,590

28,75,500

5,29,99,465

4,43,91,397

58,96,89,952

NOTE 16

FINANCE COSTS

13,01,17,164

14,91,18,807

18,73,333

28,11,09,304

2,85,11,381

25,25,97,923

(a) Salaries and Wages, including Bonus

(i) Salaries and Wages, including Bonus 48,75,33,913

(ii) Employee Separation Compensation 29,80,098

(b) Contribution to Provident and Other Funds 7,90,45,599

(c) Staff Welfare Expenses 5,29,54,726

Total Employee Benefit Expenses 62,25,14,336

(a) Interest Expenses

(i) On Fixed Loans 9,30,65,583

(ii) On Other Loans 14,58,37,800

(b) Other Borrowing Costs 13,03,333

Gross Interest 24,02,06,716

(c) Less: Interest capitalised 1,63,89,325

Total Finance Costs 22,38,17,391

Current Year

46



Previous YearApril’13 to March’14 April’12 to March’13

` `

TRL

NOTE 17

OTHER EXPENSES

(a) Stores and Spares Consumed 16,78,97,220

(b) Repairs to Buildings 5,07,19,388

(c) Repairs to Machinery 16,39,81,492

(d) Fuel Consumed 101,25,37,239

(e) Purchase of Power 19,51,51,040

(f) Contractors Charges for Refractories Management 25,75,18,486

(g) Conversion Charges 1,35,10,568

(h) Freight and Handling Charges 48,40,64,171

(i) Rent 1,85,10,713

(j) Royalty 6,72,406

(k) Rates and Taxes 63,80,467

(l) Insurance Charges 34,14,968

(m) Commission and Discounts 7,33,66,040

(n) Provision for Wealth Tax 90,000

(o) Provision for Doubtful Debts and Advances 25,66,104

(p) Excise Duties (net) 1 ,27,21,631

(q) Exchange (Gain) / Loss (net) (1,58,87,162)

(r) Other Expenses 33 ,66,58,778

Total Other Expenses 278,38,73,549

Other Expenses include :

Note. 17 (a) -

Note. 17 (b) -

Note. 17 (c) -

Note. 17 (f) - Refractories Management Expenses are the expenses incurred for erecting and relining of refractories at customer premises.

Previous Year

Note . 17 (m) - Commission and Discount comprises of :-

i) Commission paid to selling agents 7,30,12,256

ii) Discounts 3,53,784

Note. 17 (r)- Other expenses include :

Fees and out-of-pocket expenses paid to Auditors :

i) Services as Auditors (including for audit in terms of Section 44AB of the Income Tax Act, 1961

1,62,000 (Previous Year 1,62,000)) 17,44,000

ii) Fees for other Services 37,500

iii) Out-of pocket expenses 31,900

14,53,18,374

4,77,94,437

16,52,05,087

91,87,56,770

20,30,38,775

15,58,92,060

57,58,751

47,77,82,477

2,21,98,495

44,00,285

98,92,362

46,87,274

6,48,57,008

2,22,698

23,57,659

2,77,45,172

1,17,11,446

29,17,60,500

255,93,79,630

Stores & Spares Consumed - 14,53,18,374 is exclusive of 17,41,89,176 (previous year : 18,95,20,759 ) charged to Repairs to buildings, Repairs to machinery and other accounts.

Repairs to Buildings - 4,77,94,437 is exclusive of 7,61,942 (previous year : 9,24,734) charged to wages, salaries and other revenue accounts.

Repairs to Machinery - 16,52,05,087 is exclusive of 7,34,54,447 (previous year : 7,25,17,412) charged to wages, salaries and other revenue accounts.

Current Year

6,29,96,400

18,60,608

17,44,000

1,55,000

36,024

` ` `

` `

` `

Current Year

47

TRL

NOTE - 18

NOTES ON THE BALANCE SHEET AND STATEMENT OF PROFIT AND LOSS

1. ACCOUNTING POLICIES :

Accounts are maintained under the mercantile system of accounting , adopting the historical cost convention.

The Significant accounting policies are:

(i) Revenues :

a) Sales comprise of sale of goods and services, net of trade discounts.

b) Export incentives under the Duty Drawback Scheme are recognised on the basis of credits given in the bank account of the company.

c) Bonus claims, linked to operating efficiency of products, are recognised upon their crystallisation.

(ii) Claims :

Claims on underwriters/ carriers towards losses/ damages are accounted when there is certainty that the claims are realisable.

(iii) Research and Development :

Revenue expenditure on Research and Development (R&D) is charged as expenditure of the year in which it is incurred. Capital expenditure on R&D is treated as an addition to fixed assets.

(iv) Retirement Benefits :

a) Contribution to Provident Fund and Superannuation Fund (applicable to Officers only) is made at a predetermined rate to the Provident Fund Trust / Superannuation Fund Trust and charged to the Statement of Profit and Loss on an accrual basis.

b) Provision for gratuity liability, accrued leave, post retirement medical benefits and pension to ex-managing directors are made on the basis of actuarial valuation.

(v) Employee Separation Scheme :

Compensation to employees who have opted for retirement under the Friendly Departure Scheme of the Company, is charged off in the year in which the employee is relieved from the services of the Company.

(vi) Fixed Assets :

Fixed assets are valued at cost less depreciation.

(vii) Borrowing Costs :

Borrowing costs attributable to the acquisition of fixed assets and incurred upto the point of installation / commissioning of the assets are added to the cost of the respective assets.

(viii) Depreciation :

a) Depreciation is provided under the straight line method, applying the rates specified in Schedule XIV of the Companies Act,1956, or based on the estimated life, whichever is higher. With effect from April 1, 2008, assets individually costing upto 25000/- are fully depreciated in the year of acquisition. The estimated useful life of Motor Cars, Furniture & Fixtures, Fans, Air Conditioners, Refrigerators and Office Equipments is 5 years.

b) Cost incurred towards development of mines are depreciated over the useful life of the mines or lease period, whichever is less, subject to maximum of 10 years.

(ix) Impairment of Assets :

Impairment is recognized to the extent that the recoverable amount of the assets of a cash generating unit is lower than it’s carrying amount; such impairment being charged to the statement of Profit and Loss in the year in which the impairment occurs.

(x) Foreign Exchange Transactions:

Foreign currency transactions and forward exchange contracts used to hedge foreign currency transactions are initially recognised at the spot rate on the date of the transaction/ contract.

Monetary assets and liabilities relating to foreign currency transactions and forward exchange contracts, remaining unsettled at the end of the year, are translated at the year end rates.

`

48


The differences in transactions and realised gains and losses on foreign exchange transactions, are recognised in the Statement of Profit and Loss. Further, in respect of transactions covered by forward exchange contracts, the difference between the contract rate and the spot rate on the date of the transaction is recognised in the Statement of Profit and Loss over the period of the contract.

(xi) Investments :

Investments, being long term investments, are valued at cost less provision for permanent diminution in the value of such investments.

(xii) Inventories :

Raw Materials are carried at lower of cost or net realisable value.

Purchased Raw Materials in transit are carried at cost.

Stores and spare parts are valued at or below cost.

Semi-finished products and Finished products are valued at lower of cost or net realisable value.

Cost of inventories is generally ascertained on the ‘weighted average’ basis. Finished and semi-finished products are valued on full absorption cost basis.

(xiii) Deferred Tax :

Deferred Tax is accounted for by computing the tax effect of timing differences which arise in one year and reverse in subsequent periods. Deferred tax assets are recognized only to the extent that there is a reasonable or virtual certainty, as the case may be, that they will be realised in future. Deferred tax assets are reviewed at each balance sheet date for the appropriateness of their respective carrying values.

2 Contingent Liabilities

a) Contingent Liability in respect of sales tax, income tax, excise duty and service tax demanded but contended as not due and, therefore, not provided in accounts - 455.51 Lakhs (Previous Year : 472.66 Lakhs), 402.72 Lakhs (Previous Year : Nil), 164.94 Lakhs (Previous Year : 164.94 Lakhs) and 20.14 Lakhs (Previous Year :

26.85 Lakhs) respectively.

b) Guarantees amounting to 17,071.89 Lakhs (Previous Year : 15,122.33 Lakhs), include Corporate Guarantee given by the Company to State Bank of India, Shanghai Branch, with respect to term loan and working capital limits sanctioned to TRL China Ltd. - 14,666.16 Lakhs (Previous Year : 13,274.80 Lakhs)

c) Bills Discounted - 8,118.42 Lakhs (Previous Year : 7,606.29 Lakhs).

d) Other claims not acknowledged as debts - 67.91 Lakhs (Previous Year : 120.41 Lakhs).

e) Duty benefit on EPCG Licence received during the year 80.52 Lakhs (Previous year : Nil).

3 Estimated amount of contracts remaining to be executed on Capital Account and not provided for, net of advances paid - 877.36 Lakhs (Previous Year : 4492.77 Lakhs ).

4 The amount payable within one year under the Friendly Departure Scheme - 43.04 Lakhs (Previous Year : 54.15 Lakhs ).

5 Exchange difference included in other expenses - 117.11 Lakhs (Loss) [Previous Year : 158.87 Lakhs (Gain)]

6 Acceptances include bills discounted with SIDBI by suppliers, on the basis of acceptance of the Company - 2,033.24 Lakhs (Previous Year : 1,602.05 Lakhs ).

7 For the purpose of reporting in compliance with Accounting Standard-17 - Segment Reporting, issued by the Institute of Chartered Accountants of India, the business segment has been considered as the primary segment and the geographic segment has been considered as the secondary segment. The refractories segment being the only business segment, necessary information has already been given in the Balance Sheet and Statement of Profit and Loss. The Company has two geographic segments; domestic and export. Revenue from the geographic segment, based on location of customers is - (a) Domestic : 76,820.34 Lakhs (Previous Year : 74,535.71 Lakhs) and (b) Rest of the world : 14,577.55 Lakhs (Previous Year : 17,891.96 Lakhs), total - 91,397.89 Lakhs (Previous Year :

92,427.67 Lakhs).

8 Manufacturing and Other Expenses and depreciation shown in the Statement of Profit & Loss, include 372.71 Lakhs (Previous Year : 358.61 Lakhs) and 41.68 Lakhs (Previous Year : 43.72 Lakhs), respectively, in respect of Research & Development activities undertaken during the year.

` ` ` ` ` `

`

` `

` `

` `

` `

`

` `

` `

` `

` `

` ` ` ` `

`

`` ` `

49

TRL

9 The amount due to Micro and Small Enterprises, as defined in the “The Micro, Small and Medium Enterprises Development Act", 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company. The total outstanding dues of Micro and Small Enterprises is 64.91 Lakhs (Previous year : 69.26 Lakhs). Since, there is no delay in making payment to Micro, Small and Medium Enterprises, no interest is paid, accrued, due, and payable.

10 Value of Imports (CIF Value):

(i) Raw Materials 13,487.73

(ii) Finished/ Semi Finished Products 4,455.61

(iii) Components and Spares 71.71

(iv) Capital Goods 0.00

Total 18,015.05

11 Raw Materials Consumption

(I) Magnesite 5,499.13

(ii) Fused Alumina 3,234.02

(iii) Tabular Alumina 2,802.54

(iv) Calcined Bauxite 2,028.64

(v) Raw Dolomite 2,548.11

(vi) Quarzite 631.76

(vii) Others 15,560.59

Total 32,304.79

12 Value of consumption of directly Imported and Indigenously obtained Raw Materials, Stores and Spare parts and the percentage of each to the total consumption :

Raw Materials Stores, spare parts and components

Lakhs % Lakhs %

(a) Directly Imported(15,386.27) (48) (91.27) (3)

(b) Indigenously obtained(16,918.52) (52) (3,482.91) (97)

Total (32,304.79) (100) (3,574.18) (100)

Previous Year

13 Earnings in Foreign Exchange:- Lakhs

i) Export of Finished Products (FOB Value) 15,108.89 (net of export claims)

ii) Commission 170.57

iii) Others (Application Services) 1,835.10

14 Expenditure in Foreign Currency :

i ) Commission 459.27

ii ) Foreign branch expenses 202.82

iii) Royalty 6.72

iv) Payable on other accounts 287.87

Total 956.68

``

Previous Year

` Lakhs

` `

`

Current Year

` Lakhs

11,646.66

7,468.48

17.62

1,853.72

20,986.48

3,923.78

3,808.03

3,514.20

1,738.15

2,147.22

499.98

17,032.65

32,664.01

15,195.34 47 19.50 1

17,468.67 53 3,175.58 99

32,664.01 100 3,195.08 100

Current Year

Lakhs

12,663.24

308.76

653.80

525.34

274.39

44.00

113.73

957.46

50


15 Employee Benefits

a) In line with the disclosure requirements under Accounting Standard (AS) 15 (revised 2005) on Employee

Benefits, as notified by the Companies (Accounting Standard), Rules, 2006, the relevant details with respect to

employee benefits are given here below:

b) The Company has recognized, in the Statement of Profit and Loss account for the year ended 31.03.2014, an

amount of 274.64 lakhs (Previous year : 270.66 lakhs) expenses under the defined contribution plans, as

given below:

Benefit (Contribution to) Previous Year

Lakhs

Superannuation Fund 193.39

Employee Pension Scheme 77.27

270.66

c) The Company operates post retirement defined benefit plans as follows:

a. Funded

(i) Post Retirement Gratuity

b. Unfunded:

(i) Post Retirement Medical benefits

(ii) Pensions to Directors

d) Details of the Post Retirement Gratuity plan are as follows:

Description Previous Year

1). Reconciliation of opening and closing balances of obligation Lakhs

a. Obligation as at the beginning of the year 1,695.36

b. Current Service Cost 80.50

c. Interest Cost 137.26

d. Actuarial (gain)/loss 245.50

e. Benefits paid (198.65)

f. Obligation as at the end of the year 1,959.97

The defined benefit obligation as at the end of the year is wholly funded by the Company.

2). Change in Plan Assets (Reconciliation of opening & closing balances)

a. Fair Value of plan assets as at the beginning of the year 1,787.01

b. Expected return on plan assets 160.99

c. Actuarial gain/(loss) –

d. Contributions 50.00

e. Benefits paid (198.65)

f. Fair Value of plan assets as at the end of the year 1,799.34

3). Reconciliation of fair value of assets and obligations at the end of the year

a. Fair value of plan assets 1,799.34

b. Present value of obligation 1,959.97

c. Amount recognised in the balance sheet 160.63

` `

`

`

Current Year

Lakhs

206.28

68.36

274.64

Current Year

Lakhs

1,959.97

94.73

147.32

(68.29)

(237.03)

1,896.70

1,799.34

160.68

–

57.12

(237.02)

1,780.12

1,780.12

1,896.70

116.58

`

`

51

TRL

4). Expense recognised in the year

Lakhs

a. Current service cost 80.50

b. Interest cost 137.26

c. Expected return on plan assets (160.99)

d. Actuarial (gain)/loss 245.50

e. Expense recognised for the year 302.27

The expense is disclosed in Note 15 in line item – Contribution to Provident & Other Funds

5). Investment Details

The full amount has been invested in the Cash Accumulation Scheme of Life Insurance Corporation of

India.

6). Assumptions 31.03.13

a. Discount rate (per annum) 8.00%

b. Estimated rate of return on plan assets (per annum) 9.40%

c. Rate of escalation in salary (per annum) 5.00%

e) Details of non–funded post retirement defined benefit obligations are as follows:

Previous Year

Description Lakhs

Medical Ex–MD

Pension

1). Reconciliation of opening and

closing balances of obligation

a. Obligation as at the beginning of the year 593.67 332.11

b. Current Service Cost 8.54 –

c. Interest Cost 49.69 27.44

d. Actuarial (gain)/loss 43.82 117.40

e. Benefits paid (31.70) (25.98)

f. Obligation as at the end of the year 664.03 450.97

2). Expense recognised in the year

a. Current service cost 8.54 –

b. Interest cost 49.69 27.44

c. Actuarial (gain)/loss 43.82 117.40

d. Expense recognised in the year 102.05 144.84

The expense amounting to Medical : (16.68) lakhs (Previous year : 102.05 lakhs) and Ex–MD Pension :

(7.14) lakhs (Previous year : 144.84 Lakhs) are disclosed in Note 15 under the line item – Staff Welfare

Expenses.

Current Year

Lakhs

94.73

147.32

(160.68)

(68.30)

13.07

31.03.14

9.25%

9.40%

5.00%

Current Year

Medical Ex–MD

Pension

664.03 450.97

9.88 –

51.69 34.96

(78.25) (42.10)

(35.87) (27.86)

611.48 415.97

9.88 –

51.69 34.96

(78.25) (42.10)

(16.68) (7.14)

Previous Year

`

` Lakhs

`

`

` `

` `

52


3) Assumptions Medical

31.03.13

a. Discount rate (per annum) at the beginning of the year 8.60%

b. Discount rate (per annum) at the end of the year 8.00%

c. Medical costs inflation rate 5.00%

d. Average Medical Cost ( /person) 1100

e. Effect of 1% change in health care cost, on

1% Increase Lakhs

– aggregate current service and interest cost 66.04

– closing balance of obligation 87.12

1% Decrease

– aggregate current service and interest cost (50.66)

– closing balance of obligation (72.10)

f) The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority,

promotions and other relevant factors.

g) Amounts for the current and previous three Lakhs Lakhs Lakhs

years are as follows:

(i) Gratuity (Funded) 31.03.13 31.03.12 31.03.11

Defined benefit obligation 1,959.97 1,695.37 1,706.25

Plan assets 1,799.35 1,787.01 1,611.74

Surplus / (deficit) (160.62) 91.64 (94.51)

Experience adjustments on plan assets – – –

Experience adjustments on plan liabilities (174.25) (6.72) (17.53)

(ii) Post Retirement Medical Benefits

Defined benefit obligation 664.03 593.67 583.02

Plan assets – – –

Surplus / (deficit) (664.03) (593.67) (583.02)

Experience adjustments on plan assets – – –

Experience adjustments on plan liabilities (0.38) (29.93) 25.27

The above information has been certified by the actuary and has been relied upon by the Auditors.

h) Provident Fund

(a) In keeping with the Guidance on implementing Accounting Standard (AS) 15 (Revised) on Employee

Benefits notified by the Companies (Accounting Standards) Rules, 2006, employer established provident

fund trusts are treated as Defined Benefit Plans, since the Company is obliged to meet interest shortfall, if

any, with respect to covered employees. The interest shortfall, if any, is calculated on the actual basis and

provided in the accounts.

(b) The company has contributed 242.27 lakhs (Previous year : 217.52 lakhs) towards provident fund.

Medical

31.03.14

8.00%

9.25%

5.00%

1155

71.17

70.70

(53.83)

(59.84)

31.03.14

1,896.69

1,780.11

(116.58)

–

(81.26)

611.48

–

(611.48)

–

(9.76)

`

`

` ` `

` `

`

` Lakhs

Lakhs

53

TRL

16 Related Party Disclosures

List of Related Parties :

RELATED COMPANIES OF TRL KROSAKI REFRACTORIES LIMITED

Sl. No. Related Party Country

A Holding Company

Krosaki Harima Corporation Japan

B i) Subsidiary Company

TRL Asia Pte Limited Singapore

TRL China Limited China

ii) Subsidiary through Krosaki Harima Corporation, Japan

1 KROSAKI HARIMA CERA CORPORATION Japan

2 SN Refratecture Tokai Co. Ltd. Japan

3 Shin–Nippon Thermal Ceramics Corporation Japan

4 Higashihama Sangyo Corporation Japan

5 Ariake Material Limited Japan

6 Krosaki Harima (Shanghai) Enterprise Management Co. Ltd. China

7 Wuxi Krosaki Sujia Refractories Co. Ltd. China

8 Yingkou Krosaki Refractory Co. Ltd. China

9 Wuxi Krosaki Machinery Co. Ltd China

10 Shenyang NEU–Krosaki Refractory Co. Ltd China

11 Qinhuangdao Shougang Krosaki Refractories Co. Ltd. China

12 Beijing Dongzu Xinye Kemao Co. Ltd. China

13 Krosaki Amr Refractarios, S.A. Spain

14 Krosaki Harima Europe B.V. Netherland

15 Krosaki USA Inc. USA

16 Krosaki Magnesita Refractories, LLC. Brazil

C i) Associate Company

1 Almora Magnesite Limited India

ii) Associate through Krosaki Harima Corporation, Japan

1 KIKUTAKE SANGYO CORPORATION Japan

2 Chugoku Chikuro Corporation Japan

3 Maejima Kogyo Corporation Japan

4 Godo Ceramics Corporation Japan

5 Jinan Xinbao Refractories Co. Ltd. China

6 Dandong Harima Refractories Co. Ltd. China

7 Yingkou Krosaki Toshin Minerals Co. Ltd. China

8 Shanghai Baoyejianshe Industrial Furnace Engineering &

Technology Co. Ltd. China

9 Yingkou Kyushu Refractories Co. Ltd. China

10 Australia Krosaki CIC Australia Pty. Ltd. Australia

11 IFGL Exports Limited India

D Promoters holding more than 20%

Tata Steel Limited India

E Key Management Personnel :

Dr. A.K.Chattopadhyay, Managing Director

Relatives of Key Management Personnel :

Mrs. Supriya Chatterjee

Mrs. Poulomi Kumar

Ms. Rituparna Chatterjee

54


17 Transactions with Related Parties Previous Year

April’12 to

March’13

Lakhs

I ) Purchase of Raw Materials

Holding Company 111.29

Associates 138.62

Promoters holding more than 20% 146.48

II ) Purchase of Finished/Traded Products


Subsidiaries 2,266.80

III ) Sales


Associates –

Subsidiaries 255.67

Promoters holding more than 20% 9,180.58

IV) Receiving of Services from


V) Rendering of Services to

Subsidiaries 170.57


Fellow Subsidiaries –

VI) Dividend paid



VII) Royalty

Holding Company –

VIII) Outstanding balances

Debtors


Subsidiaries 1,455.14

Promoters holding more than 20% 2,101.51

IX) Loans and Advances Given

Holding Company –


X) Advance from Customer


Promoters holding more than 20% –

XI) Creditors


Subsidiaries 243.90

Associates 30.88


XII ) Key Management Personnel

Remuneration paid

Dr. A. K. Chattopadhyay 141.37

Current Year

April’13 to

March’14

475.42

123.49

1,432.94

4,318.44

1,838.29

126.69

9.49

194.01

15,166.79

92.41

308.76

97.99

2.29

106.59

42.39

44.00

93.24

992.16

2,532.38

137.63

111.42

–

23.03

1,675.80

265.15

5.67

240.65

147.70

` Lakhs `

18 Earnings per Share (EPS)

EPS is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of

shares outstanding during the year. The basic and diluted earnings per share has been calculated below :

Previous Year

(a) Profit after Tax (in Lakhs) 691.87

(b) Profit attributable to Ordinary Share Holders (in lakhs) 691.87

(c) No of ordinary Shares of Basic EPS (in lakhs) Nos 209.00

(d) Nominal Value per share 10.00

(e) Basic Earning per Ordinary Share 3.31

19 Major Components of Deferred Tax Assets and Deferred Tax Liabilities

i) Deferred Tax Assets Lakhs

(a) Tax on expenditure allowed on payment basis U/S 43B of

the Income Tax Act 1961.(“the Act”) 425.65

(b) In respect of unpaid royalty U/S 40(a) of the Act. –

(c) In respect of provision for doubtful debts and advances U/S 36(2) of the Act 16.81

(d) Tax on difference between the amount charged in the books in respect

of Early Retirement Compensation and the deduction allowed in respect

thereof under the Act. 140.96

Total 583.42

ii) Deferred Tax Liabilities

On the timing difference between Book Depreciation and

Income Tax Depreciation 1669.89

Net Deferred Tax Liability 1,086.47

20 Figures in respect of the previous year have been recast to correspond to groupings of the current year.

Current Year

289.11

289.11

209.00

10.00

1.38

390.99

10.33

23.70

105.50

530.52

1489.47

958.95

`

`

`

`

`





` Lakhs

55

TRL

INDEPENDENT AUDITORS’ REPORT

TO THE BOARD OF DIRECTORS OFTRL KROSAKI REFRACTORIES LIMITED

Report on Consolidated Financial Statements.

We have audited the accompanying consolidated financial statements of TRL KROSAKI REFRACTORIES LIMITED(“the

Company”) and its subsidiaries (the Company and its subsidiaries constitute “the Group”), which comprise the Consolidated

Balance Sheet as at March 31, 2014, Consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement for

the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the

consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance

with accounting principles generally accepted in India; this includes the design, implementation and maintenance of internal

control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and

are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our

audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those

Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance

about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated

financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of

material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the

consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit

also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting

estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration

of the unaudited financial statements of the subsidiary and associate; referred to below in the Other Matter paragraph,

theconsolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted

in India:

(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2014;

(b) in the case of the Consolidated Statement of Profit and Loss, of the profit of the Group for the year ended on that

date; and

(c) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that

date.

56


Other Matters

1. We did not audit the consolidated financial statements of the subsidiary, whose consolidated financial statements

reflect total assets (net) of 3647.70 lakhs as at March 31, 2014, total revenues of 19142.78 lakhs and net cash

inflows amounting to 140.35 lakhs for the year then ended. These consolidated financial statements have been

certified by the Management.

2. We did not audit the accounts of the associate, which reflect the Group’s Share of Loss (net) for the year

48.38lakhs. The financial statements of the associate have been certified by the Management.

Our opinion is not qualified in respect of these matters.

For N. M. Raiji and Co.

Chartered Accountants

Firm’s Registration Number: 108296W

Vinay D. Balse

Partner

Membership Number: 39434

Place: Mumbai

Date: May 12, 2014

` `

`

`

57

TRL

(I) EQUITY AND LIABILITIES





(1) Shareholders’ Funds

(a) Share Capital 01 20,90,00,000

(b) Reserves and Surplus 02 243,40,05,939

264,30,05,939

(2) Minority Interest 3,32,20,631

(3) Non-Current Liabilities

(a) Long-term Borrowings 03 66,29,54,075

(b) Deferred tax Liabilities (net) 10,86,46,598

(c) Long-term Provisions 04 21,89,77,112

99,05,77,785

(4) Current Liabilities

(a) Short-term Borrowings 03 170,24,41,295

(b) Trade Payables 05 161,63,11,559

(c) Other Current Liabilities 05 54,66,54,247

(d) Short-term Provisions 04 13,04,88,466

399,58,95,567

TOTAL EQUITY AND LIABILITIES 766,26,99,922

(II) ASSETS

(1) Non-Current Assets

(a) Fixed Assets

(i) Tangible Assets 06 249,91,59,444

(ii) Capital work-in-progress 06 37,94,88,307

(iii) Intangible Assets 06 5,57,84,587

(iv) Intangible assets under development 06 78,80,231

294,23,12,569

(b) Non-current Investments 07 1,19,27,611

(c) Long-term Loans and Advances 08 23,67,26,318

319,09,66,498

(2) Current Assets

(a) Inventories 10 195,47,12,388

(b) Trade Receivables 09 200,83,71,026

(c) Cash and Cash Equivalents 11 16,55,79,524

(d) Short-term Loans and Advances 08 33,90,96,968

(e) Other Current Assets 09 39,73,518

447,17,33,424

TOTAL ASSETS 766,26,99,922

Notes to Consolidated Balance Sheet and Statement of 17Profit and Loss.

20,90,00,000

248,15,83,363

269,05,83,363

3,97,92,523

63,85,87,399

9,58,95,088

20,86,62,274

94,31,44,761

182,69,61,598

218,06,62,822

62,73,78,509

12,63,12,660

476,13,15,589

843,48,36,236

247,64,89,130

69,82,24,142

6,61,36,448

-

324,08,49,720

70,89,815

24,18,26,905

348,97,66,440

234,42,22,768

214,66,42,842

11,69,56,822

32,24,59,108

1,47,88,256

494,50,69,796

843,48,36,236

58


TRL KROSAKI REFRACTORIES LIMITED AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2014

TRL

As at 31.03.2013Note ` `

I REVENUE

Revenue from Operations 12 1069,44,19,129

Less: Excise duty recovered on Sales 88,58,06,444

980,86,12,685

II Other Income 13 4,61,21,332

III Total Revenue ( I+II ) 985,47,34,017

IV EXPENSES

(a) Raw Materials Consumed 400,24,99,387

(b) Purchases of finished, semi-finished and other products 145,28,38,644

(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade 1,96,41,639

(d) Employee Benefits Expenses 14 71,34,89,499

(e) Finance Costs 15 27,81,17,934

(f) Depreciation 33,89,28,282

(g) Other Expenses 16 311,60,14,279

992,15,29,664

(h) Less: Expenditure (other than interest) capitalised. 8,75,57,629

Total Expenses ( IV ) 983,39,72,035

V Profit before tax ( III - IV ) 2,07,61,982

VI Tax Expense

(1) Current tax 6,16,00,000

(2) Deferred tax (3,41,79,816)

Total Tax Expense ( VI ) 2 ,74,20,184

VII Profit after tax ( V - VI ) (66,58,202)

VIII Share of loss of associate (13,95,033)

IX Minority Interest (87,04,549)

X Profit for the period ( VII+VIII-IX ) 6,51,314

XI Earnings per equity share:

Basic / Diluted 0.03

Notes to Consolidated Balance Sheet and Statement of Profit and Loss. 17

1112,30,31,931

93,97,13,831

1018,33,18,100

3,55,89,012

1021,89,07,112

431,10,08,949

192,66,22,382

(31,54,40,919)

69,07,79,345

30,27,75,766

32,73,33,036

295,56,15,785

1019,86,94,344

5,02,35,811

1014,84,58,533

7,04,48,579

2 ,36,00,000

(1,27,51,510)

1 ,08,48,490

5 ,96,00,089

(48,37,796)

24,63,819

5 ,22,98,474

2.50





TRL KROSAKI REFRACTORIES LIMITED AND ITS SUBSIDIARIESCONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2014

Apr'12 to Mar'13Note ` `

TRL

Previous Year

60


TRL KROSAKI REFRACTORIES LIMITED AND ITS SUBSIDIARIESCONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2014

Previous Year

` `

TRL

A. Cash Flow from Operating activities:

Profit before taxes, minority interest & share of profit of associate 2,07,61,982

Adjustments for:

Depreciation expenses 33,89,28,282

Dividend Income (8,01,400)

Profit on sale of assets (13,41,381)

Interest Income (33,59,511)

Interest expenses 27,81,17,934

Foreign exchange gain on consolidation 12,22,85,945

Provision for wealth tax 90,000

Operating profit before working capital changes 75,46,81,851

Adjustments for:

Trade and other receivables 2,07,63,990

Inventories (4,96,51,618)

Trade payables and other liabilites 2,18,78,906

Cash generated from operations 74,76,73,129

Direct tax paid ( net of refunds) (6,95,92,865)

Net Cash from Operating Activities……….A 67,80,80,264

B. Cash Flow from Investing Activities:

Purchase of fixed assets (59,75,62,342)

Sale of fixed assets 44,66,178

Net movement in creditors for capital goods 88,55,980

Interest received 32,56,509

Dividend received 8,01,400

Net cash used in Investing Activities ………. B (58,01,82,275)

C. Cash Flow from Financing activities:

Proceeds from borrowings 382,13,49,401

Repayment of borrowings (356,95,36,516)

Interest paid (27,75,77,541)

Dividend Paid (8,50,16,759)

Net Cash used in Financing Activities ……….. C (11,07,81,415)

Net increase or (decrease) in cash or cash equivalents ( A+B+C) (1,28,83,426)

Cash & Cash equivalents as at 1st April, 2013 17,84,62,950

Cash & Cash equivalents as at 31st March, 2014 16,55,79,524

7,04,48,579

32,73,33,036

(27,500)

(2,83,858)

(23,99,053)

30,27,75,766

3,45,81,526

2,22,698

73,26,51,194

(12,54,17,434)

(38,95,10,380)

51,15,22,129

72,92,45,509

(3,60,08,421)

69,32,37,088

(63,71,86,903)

8,58,026

(61,37,414)

25,05,929

27,500

(63,99,32,862)

341,74,40,710

(319,37,74,290)

(30,11,41,393)

(2,44,51,955)

(10,19,26,928)

(4,86,22,702)

16,55,79,524

11,69,56,822





Apr'12 to Mar'13

61

TRL KROSAKI REFRACTORIES LIMITED AND ITS SUBSIDIARIES

NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET

As at 31.03.2014 As at 31.03.2013

` `NOTE 01 : SHARE CAPITAL

TRL

2,50,00,000 Equity Shares of 10 each 25,00,00,000

25,00,00,000

Issued:

2,09,00,000 Equity Shares of 10 each 20,90,00,000

20,90,00,000 Subscribed and paid-up :

2,09,00,000 (2,09,00,000) Equity Shares of 10 each, fully paid-up 20,90,00,000

Total Share Capital 20,90,00,000

Out of the above :

a) 15,00,000 shares of 10 each were allotted as fully paid-up bonus shares by capitalisation of General Reserve in the financial year 1977-78.

b) Reconciliation of Shares

As at 1st April 2013

Particulars Number of Shares

Equity Shares as at the beginning and 2,09,00,000 20,90,00,000end of the year

c) Share holders holding more than 5% shares

As at 31st March 2013

Name of the Share holders No. of shares % of

held holding

Krosaki Harima Corporation 1,06,59,000 51.00

Tata Steel Limited 42,39,360 20.28

Steel Authority of India 22,03,150 10.54

Kalimati Investment Company Limited 13,24,504 6.34

As at March 2013

(a) Reserves representing unrealised gains

Foreign Currency Translation Reserve 11,19,66,563

(b) Other Consolidated Reserves

(1) Capital Reserve

Balance as per last account 76,23,192

(2) Securities Premium Reserve


(3) General Reserve


Add: Amount transferred from Statement of Profit & Loss - 20,00,000

135,73,70,908

Authorised:

`

`

`

`

`

`

25,00,00,000

25,00,00,000

20,90,00,000

20,90,00,000

20,90,00,000

20,90,00,000


Number of Shares

2,09,00,000 20,90,00,000


No. of shares % of

held holding

1,06,59,000 51.00

42,39,360 20.28

22,03,150 10.54

13,24,504 6.34

As at March 2014

13,16,97,468

76,23,192

75,73,04,560

135,73,70,908

135,73,70,908

`

`

02 - RESERVES & SURPLUS

62




As at 31.03.2014 As at 31.03.2013NOTE 02 : RESERVES AND SURPLUS (Contd....) ` `

NOTE 03 : BORROWINGS As at 31.03.2014 As at 31.03.2013

Long Current Short Total Long Current Short TotalTerm maturities of Term Term maturities of Term

Long-term * Long-term *` ` ` ` ` ` ` `

TRL

(c) Statement of Profit and Loss :

Profit after tax 6,51,314

Add: Statement of Profit and Loss balance brought forward from previous year 22,55,41,357

Total 22,61,92,671

Less : Appropriation

(i) Proposed Dividends 2,09,00,000

(ii) Corporate Dividend Tax 35,51,955

(iii) Transfers to General Reserve 20,00,000

19,97,40,716

Total Reserves and Surplus 243,40,05,939

5,22,98,474

19,97,40,716

25,20,39,190

2 ,09,00,000

35,51,955

22,75,87,235

248,15,83,363

–

A. Secured Borrowings

(a) Term Loans

i) From Banks 22,09,57,411 14,11,33,814 – 36,20,91,225(Refer 1 below)

ii) Interest accrued – – – – and due on borrowings

(b) Repayable on Demand

From Banks – – 123,24,41,295 123,24,41,295(Refer 2 below)

Total Secured Borrowings 22,09,57,411 14,11,33,814 123,24,41,295 159,45,32,520

B. Unsecured Borrowings

(a) Term Loans

From Banks (Refer 3 below) 39,41,66,664 15,58,33,336 – 55,00,00,000

(b) Short Term Loans

From Banks – – 47,00,00,000 47,00,00,000

(c) Fixed Deposits 4,78,30,000 1,54,52,000 – 6,32,82,000

(d) Interest accrued and due on fixed deposits – 62,952 – 62,952

Total Unsecured Borrowings 44,19,96,664 17,13,48,288 47,00,00,000 108,33,44,952

Total Borrowings 66,29,54,075 31,24,82,102 170,24,41,295 267,78,77,472

* Current maturities of long–term borrowings will be reported as a part of Other Current Liabilities.

Note: 1 Secured by charge over Plant and Machinery , other equipments and fixed assets at the Company’s existing plant site at Belpahar (Odisha) repayable in 20 equal quarterly instalments . The next installment is due on 30th June, 2014. For foreign subsidiary company TRL China Ltd, secured by first charge by way of mortagage of building , plant and machinery . The next installment is due on 1st June, 2014

Note: 2 Secured by hypothecation of current assets, both present and future, by way of pari–passu first charge and second charge over fixed assets. For foreign subsidiary company TRL China Ltd, secured by first charge by way of mortagage of building , plant and machinery

Note: 3 Secured by Corporate Guarantee of Krosaki Harima Corporation, Japan , repayable in 12 quarterly instalments . The next installment is due on 30th June, 2014.

8,59,73,401 15,18,55,276 – 23,78,28,677

– 7,40,552 – 7,40,552

– – 135,69,61,598 135,69,61,598

8,59,73,401 15,25,95,828 135,69,61,598 159,55,30,827

49,74,99,998 27,66,66,667 77,41,66,665

5,51,14,000 74,10,000 – 6,25,24,000

– 56,645 – 56,645

55,26,13,998 28,41,33,312 47,00,00,000 130,67,47,310

63,85,87,399 43,67,29,140 182,69,61,598 290,22,78,137

47,00,00,000 47,00,00,000

63



NOTE 04 : PROVISIONS As at 31.03.2014 As at 31.03.2013


` ` ` ` ` `

TRL

(a) Provision for Employee Benefits 17,98,15,600 8,54,50,927 26,52,66,527

(b) Provision for Employee

Separation Compensation 1,40,80,509 54,15,436 1,94,95,945

(c) Provision for Tax – 1,51,70,148 1,51,70,148

(d) Proposed Dividend – 2,09,00,000 2,09,00,000

(e) Corporate Dividend Tax – 35,51,955 35,51,955

(f) Other Provisions 2,50,81,003 – 2,50,81,003

Total Provisions 21,89,77,112 13,04,88,466 34,94,65,578

16,83,54,380 8,23,86,220 25,07,40,600

1,30,80,922 43,04,337 1,73,85,259

– 1,51,70,148 1,51,70,148

– 2 ,09,00,000 2,09,00,000

– 35,51,955 35,51,955

2,72,26,972 – 2,72,26,972

20,86,62,274 12,63,12,660 33,49,74,934

As at 31.03.2014 As at 31.03.2013` `

Current Liabilities

(I) Trade Payables

(a) Creditors for Supplies / Services 135,20,42,287

(b) Creditors for accrued wages and salaries 4,81,81,848

(c) Acceptances 21,60,87,424

Total Trade Payables 161,63,11,559

(II) Other Current Liabilities

(a) Current Maturities of long-term debt 31,24,19,150

(b) Interest accrued but not due on borrowings 1,25,23,158

(c) Interest accrued and due on borrowings 62,952

(d) Unpaid Dividends 59,59,589

(e) Unpaid Matured Deposits 4,15,000

(f) Advances received from customers 11,95,24,284

(g) Creditors for Other Liabilities 9,57,50,114

Total Other Current Liabilities 54,66,54,247

( III ) Total Trade and Other Payables 216,29,65,806

188,58,58,500

4,09,66,661

25,38,37,661

218,06,62,822

43,59,31,943

1,41,73,886

46,597

61,51,729

1,30,000

8,08,19,481

9,01,24,873

62,73,78,509

280,80,41,331

NOTE - 05 : TRADE AND OTHER PAYABLES

64

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9) (

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586

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332

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59

254

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4,14

2 (

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) – (

78,8

0,23

1)

324

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49,7

20 (

294,

23,1

2,56

9)

65



NOTE 07 : INVESTMENTS No. of equity shares As at March 2014 As at March 2013of Face Falue of Non-current Non-Current

` 10 each fully paid-up ` `

unless otherwise specified

NOTE 08 : LOANS AND ADVANCE As at 31.03.2014 As at 31.03.2013


` ` ` ` ` `

TRL

A Trade Investments (At Cost)

Equity Shares (Unquoted)

Investment in Associate Company

Almora Magnesite Limited 1,19,17,611

B Other than Trade Investments (At Cost)

1) Equity Shares (Quoted)

a) Tata Construction and Projects Limited 18,42,020


b) HDFC Bank Limited 10,000(Face Value of 2 each )

2) Debentures (Unquoted)*

Tata Construction and Projects Limited

(10% Secured Debentures – 8,00,000Face Value of 100 each)


(* Quotation not available)

Total Investments 1,19,27,611

Quoted Investments:

– Cost (Net of provision for diminution) 10,000

– Market Value 31,20,500

Unquoted Investments:

– Cost (Net of provision for diminution) 1,19,17,611

77,990 70,79,815

1,44,202 18,42,020

5,000 10,000

8,000 8,00,000

(18,42,020)

(8,00,000)

70,89,815

10,000

37,44,000

70,79,815

`

`

(a) Capital Advances 2,01,88,670 – 2,01,88,670

(b) Security Deposits 3,20,33,066 – 3,20,33,066

(c) Advance with public bodies 12,33,84,259 14,50,65,365 26,84,49,624

(d) Advance payment of Income –tax (net of provisions) 6,11,20,323 – 6,11,20,323

(e) Other Loans and Advances – 19,55,13,122 19,55,13,122

Gross Loans and Advances 23,67,26,318 34,05,78,487 57,73,04,805

Less: Provision for Bad & Doubtful Loans & Advances

Other Loans and Advances – 14,81,519 14,81,519

Total Provision for Bad & Doubtful Loans & Advances – 14,81,519 14,81,519

Total Loans and Advances 23,67,26,318 33,90,96,968 57,58,23,286

32,83,053 – 32,83,053

3,21,53,784 – 3,21,53,784

13,30,31,022 16,15,78,889 29,46,09,911

7,33,59,046 – 7,33,59,046

– 16,24,15,134 16,24,15,134

24,18,26,905 32,39,94,023 56,58,20,928

– 15,34,915 15,34,915

– 15,34,915 15,34,915

24,18,26,905 32,24,59,108 56,42,86,013

66




NOTE 09 : TRADE AND OTHER RECEIVABLES As at Mar 2014 As at Mar 2013` `

NOTES FORMING PART OF CONSOLIDATED STATEMENT OF PROFIT AND LOSS

NOTE 12 : REVENUE FROM OPERATIONS April’13 to March’14 April’12 to March’13` `

TRL

Current Trade Receivable and Other Assets

(a) Current Trade Receivables

(1) More than six months 80,01,37,502

(2) Others 124,17,86,068

Gross Current Trade Receivables 204,19,23,570

Less: Provision for bad and doubtful debts 3,35,52,544

Net Current Trade Receivables 200,83,71,026

(b) Other Current Assets

Interest accrued on Deposits 1,14,244

Other Current Assets 38,59,274

Total Other Current Assets 39,73,518

(a) Raw Materials 88,30,98,553(including purchased raw materials–in–transit at cost)

(b) Work–in–progress (at cost ) 23,07,43,069

(c) Finished and semi–finished goods 55,18,89,429(at lower of cost or net realisable value )

(d) Stock–in–trade of goods acquired for trading 7,26,87,798(at lower of cost or net realisable value (including purchased goods – in – transit))

(e) Fuel, Loose Tools, Stores and Spares (at cost) 21,62,93,539

Total Inventories 195,47,12,388

(a) Cash in hand 5,11,209

(b) Cheques, drafts in hand 62,28,147

(c) Balances with Banks

(i) In Current Account 15,15,92,579

(ii) for Dividend Payment 59,59,589

(iii) In Deposit Account 12,88,000

Total Cash and Cash Equivalents 16,55,79,524

79,37,15,095

137,06,94,741

216,44,09,836

1,77,66,994

214,66,42,842

7,368

1,47,80,888

1,47,88,256

96,75,33,622

35,42,63,317

70,21,17,956

12,44,65,482

19,58,42,391

234,42,22,768

Cash and Cash Equivalents

2,27,925

15,65,550

10,89,29,618

61,51,729

82,000

11,69,56,822

NOTE

NOTE 11 :

10 : INVENTORIES

(a) Sale of Products ( including Excise Duty ) 1019,79,39,562

(b) Income from Sale of Services 36,42,72,232

(c) Other Operating Income 13,22,07,335

Total Revenue from Operations 1069,44,19,129

(a) Interest Income 33,59,511

(b) Dividend Income 801,400

(c) Profit on sale of capital assets 13,41,381

(d) Credit Balances / Provisions no longer required written back (Net) 4,06,19,040

Total Other Income 4,61,21,332

1069,52,84,728

24,25,97,354

18,51,49,849

1112,30,31,931

23,99,053

27,500

2,83,858

3,28,78,601

3,55,89,012

NOTE 13 : OTHER INCOME

67


NOTES FORMING PART OF CONSOLIDATED STATEMENT OF PROFIT AND LOSS

NOTE 14 : EMPLOYEE BENEFIT EXPENSES April’13 to March’14 April’12 to March’13` `

TRL

(a) Salaries and Wages, including bonus

(1) Salaries and Wages including Bonus 54,97,63,730

(2) Employee Separation Compensation 29,80,098

(b) Contribution to Provident and Other Funds 9,92,60,222

(c) Staff Welfare Expenses 6,14,85,449

Total Employee Benefit Expenses 71,34,89,499

(a) Interest Expenses

(1) On Fixed Loans 12,14,61,139

(2) On Other Loans 17,17,42,787

(b) Other Borrowing Costs 13,03,333

Gross Interest 29,45,07,259

( c ) Less: Interest Capitalised 1,63,89,325

Total Finance Costs 27,81,17,934

(a) Stores and Spares Consumed 19,19,08,471

(b) Repairs to Buildings 5,07,19,388

(c) Repairs to Machinery 18,25,34,161

(d) Contractors Charges for Refractories Management 28,52,00,843

(e) Fuel Consumed 101,25,37,239

(f) Purchase of Power 23,50,87,630

(g) Conversion Charges 1,57,06,123

(h) Freight and Handling Charges 62,33,58,593

(i) Rent 1,91,27,535

(j) Royalty 14,38,898

(k) Rates and Taxes 2,20,68,466

(l) Insurance Charges 62,32,661

(m) Commission and Discounts 7,94,55,211

(n) Provision for Wealth tax 90,000

(o) Provision for Doubtful Debts and Advances 1,62,27,025

(p) Excise Duties (net) 1 ,27,21,631

(q) Exchange ( Gain ) / Loss (net) (26,96,699)

(r) Other Expenses 36,42,97,103

Total Other Expenses 311,60,14,279

Other expenses include:

Auditors remuneration and out-of-pocket expenses 34,03,825

(i) As Auditors 26,75,774

(ii) For Taxation matters 2,46,213

(iii) For Other services 79,557

(iv) Auditors out-of-pocket expenses 4,02,281

56,15,27,082

28,75,500

7,54,22,141

5,09,54,622

69,07,79,345

NOTE 15 : FINANCE COSTS

14,86,28,003

18,07,85,811

18,73,333

33,12,87,147

2,85,11,381

30,27,75,766

NOTE 16 : OTHER EXPENSES

16,88,53,000

4,77,94,437

19,07,86,293

16,38,74,032

91,87,56,770

25,64,73,613

75,71,754

64,97,55,939

2,28,64,963

47,41,116

3,30,86,534

75,11,506

6,33,23,141

2,22,698

3,11,13,867

2 ,77,45,172

2 ,69,57,430

33,41,83,520

295,56,15,785

36,23,463

27,75,784

2,30,628

2,23,895

3,93,156

68



NOTE 17 :

TRL

NOTES ON THE CONSOLIDATED BALANCE SHEET AND STATEMENT OF PROFIT AND LOSS OF THE COMPANY

AND ITS SUBSIDIARIES FOR THE FINANCIAL YEAR ENDING 31ST MARCH, 2014.

1 Principles of Consolidation:

The Consolidated Financial Statements relate to TRL Krosaki Refractories Limited (“the Company”) and its majority

owned Subsidiary Companies and Associates. The Consolidated Financial Statements have been prepared on the

following basis:

- The financial statements of the Company and its Subsidiary Companies have been combined on a line-by-line

basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully

eliminating intra-group balances and intra-group transactions resulting in unrealized profits or losses in

accordance with Accounting Standard 21-Consolidated Financial Statements, as notified by the Companies

(Accounting Standards) Rules, 2006.

- In case of foreign subsidiaries, revenue items are consolidated at the average rate prevailing during the year. All

assets and liabilities are converted at the rates prevailing at the end of the year. Exchange gains/ (losses) arising

on conversion are recognized under Foreign Currency Translation Reserve (arising on consolidation).

- Investment in Associate Company has been accounted for under the equity method, as per Accounting Standard

23 ‘Accounting for investment in Associates in Consolidated Financial Statements’, as notified by the Companies

(Accounting Standards) Rules, 2006.

- The financial statements of the subsidiaries used in the consolidation are drawn up to the same reporting date as

that of the Company, i.e. 31st March, 2014.

- Minority interest in the net assets of consolidated subsidiaries consists of :

(a) The amount of equity attributable to minorities at the date on which investment in a subsidiary is made; and

(b) The minorities’ share of movements in equity since the date the parent subsidiary relationship came into

existence.

- Minority interest’s share of net profit/(loss) for the year of consolidated subsidiaries is identified and adjusted

against the profit after tax of the group.

- Intra-group balances and intra-group transactions and resulting unrealised profits are eliminated.

The list of Subsidiaries and Associate which are included in the consolidation and the Company’s holding therein

are as under:

Ownership in % either Country

directly or through of

Subsidiaries Incorporation

Name of the Subsidiary Company 2012-13

TRL Asia Pvt Ltd. 88% Singapore

TRL China Ltd. (Subsidiary of TRL Asia Pvt. Ltd.) 88% China

Name of the Associate Company

Almora Magnesite Limited 39% India

- In the case of the following, unaudited financial statements, as certified by the Management, have been

considered for the purpose of consolidation.

Almora Magnesite Limited (Associate)

TRL Asia Pvt Limited (Subsidiary)

2013-14

88%

88%

39%

69

TRL

2 Accounting Policies

(i) General :

The Financial statements are prepared under the historical cost convention on an accrual basis and in conformity

with accounting standards, as notified by the Companies ( Accounting Standard ) Rules, 2006.

(ii) Revenues :

a) Sales comprise of sale of goods and services, net of trade discounts.

b) Export incentives under the Duty Drawback Scheme are recognized on the basis of credits given in the bank

account of the Company.

c) Bonus claims, linked to operating efficiency of products, are recognized upon their crystallisation.

(iii) Claims :

Claims on underwriters / carriers towards losses / damages are accounted when there is certainty that the claim

are realisable.

(iv) Research and Development :

Revenue expenditure on Research and Development (R&D) is charged as expenditure of the year in which it is

incurred. Capital expenditure on R&D is treated as an addition to fixed assets.

(v) Retirement Benefits :

a) Contribution to Provident Fund and Superannuation Fund (applicable to Officers only) is made at a

predetermined rate to the Provident Fund Trust / Superannuation Fund Trust and charged to the Statement

of Profit and Loss Account on accrual basis.

b) Provision for gratuity liability, accrued leave, post retirement medical benefits and pension to ex-managing

directors are made on the basis of actuarial valuation.

(vi) Employee Separation Scheme :

Compensation to employees who have opted for retirement under the Friendly Departure Scheme of the

Company, is charged off in the year in which the employee is relieved from the services of the company.

(vii) Fixed Assets :

Fixed assets are valued at cost less depreciation.

(viii) Borrowing Costs :

Borrowing costs attributable to the acquisition of fixed assets and incurred up to the point of installation /

commissioning of the assets are added to the cost of the respective assets.

(ix) Depreciation :

a) Depreciation is provided under the straight line method, applying the rates specified in Schedule XIV of the

Companies Act, 1956, or based on the estimated life, whichever is higher. With effect from April 1, 2008,

assets individually costing upto 25,000/- are fully depreciated in the year of acquisition. The estimated

useful life of Motor Car, Furniture & Fixture, Fans, Air Conditioners, Refrigerators and Office Equipments is

5 years.

b) Cost incurred towards development of mines are depreciated over the useful life of the mines or lease

period, whichever is less, subject to maximum of 10 years.

c) In the case of a foreign subsidiary, the assets are depreciated on a straight line basis over the estimated

useful lives of the assets. Leasehold land of a foreign subsidiary is amortized over the life of the lease.

(x) Impairment of Assets :

Impairment is recognized to the extent that the recoverable amount of the assets of a cash generating unit is lower

than it’s carrying amount; such impairment being charged to the Statement of Profit and Loss in the year in which

the impairment occurs.

(xi) Foreign Exchange Transactions:

Foreign currency transactions and forward exchange contracts used to hedge foreign currency transactions, are

initially recognised at the spot rate on the date of the transaction / contract.

Monetary assets and liabilities relating to foreign currency transactions and forward exchange contracts

remaining unsettled at the end of the year, are translated at the year end rates.

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The differences in transactions and realised gains and losses on foreign exchange transactions are recognised in

the Statement of Profit and Loss. Further, in respect of transactions covered by forward exchange contract, the

difference between the contract rate and the spot rate on the date of the transaction is recognised in the

Statement of Profit and Loss over the period of the contract.

(xii) Investments :

Investments, being long term investments, are valued at cost less provision for permanent diminution in the value

of such investments.

(xiii) Inventories :

Raw Materials are carried at lower of cost or net realisable value.

Purchased Raw Materials in transit are carried at cost.

Stores and spare parts are valued at or below cost.

Semi-finished products and Finished products are valued at lower of cost or net realizable value.

Cost of inventories is generally ascertained on the ‘weighted average’ basis. Finished and semi-finished products

are valued on full absorption cost basis.

(xiv) Deferred Tax :

Deferred Tax is accounted for by computing the tax effect of timing differences which arise in one year and reverse

in subsequent periods. Deferred tax assets are recognized only to the extent that there is a reasonable or virtual

certainty, as the case may be, that they will be realised in future. Deferred tax assets are reviewed at each balance

sheet date for the appropriateness of their respective carrying values.

3 Contingent Liabilities

a) Contingent Liability in respect of sales tax, income tax, excise duty and service tax demanded but contended as

not due and, therefore, not provided in accounts 4,55,51,826 (Previous Year: 4,72,65,822), 4,02,72,458

(Previous Year: NIL), 1,64,93,523 (Previous Year : 1,64,93,523) and 20,14,132 (Previous Year: 26,85,510)

respectively.

b) Bank Guarantees - 24,51,42,228 (Previous Year: 19,91,11,044).

c) Bills Discounted - 100,65,89,814 (Previous Year : 82,94,46,682)

d) Other claims not acknowledged as debts - 67,91,203 (Previous Year : 1,20,41,203).

e) Duty benefit on EPCG Licence received during the year - 80,52,114 (Previous Year : Nil).

4 Estimated amount of contracts remaining to be executed on Capital Account and not provided for, net of advances paid -

8,77,36,897 (Previous Year : 44,92,77,395).

5 The amount payable within one year under the Friendly Departure Scheme - 43,04,337 (Previous Year : 54,15,436)

6 Exchange difference included in other expenses - 2,69,57,430 (Loss) [Previous Year: 26,96,669 (Gain)].

7 Acceptances include bills discounted with SIDBI by suppliers, on the basis of acceptance of the Company -

20,33,24,337 (Previous Year : 16,02,05,763.

8 For the purpose of reporting in compliance with Accounting Standard-17, as notified by the Companies (Accounting

Standards) Rules, 2006, on segment reporting, the business segment has been considered as the primary segment

and the geographic segment has been considered as the secondary segment. Refractories segment being the only

business segment, necessary information has already been given in the Balance Sheet and Statement of Profit and

Loss. The Company has two geographic segments; domestic and export sales. Revenue from geographic segments

based on location of customers is - a) Domestic : 904,30,20,139 (Previous Year : 850,99,17,180) and b) Rest of the

world : 208,00,11,792 (Previous Year : 218,45,01,949); Total - 1112,30,31,931 (Previous Year : 1069,44,19,129).

9 Manufacturing and Other Expenses and depreciation shown in the Statement of Profit & Loss, include 3,72,71,234

(Previous Year : 3,58,61,249) and 41,67,718 (Previous Year : 43,71,995), respectively, in respect of Research &

Development activities undertaken during the year.

10 The amount due to Micro and Small Enterprise, as defined in the “The Micro, Small and Medium Enterprises

Development Act, 2006” has been determined to the extent such parties have been identified on the basis of

information available with the Company. The total outstanding dues of Micro and Small Enterprises is 64,91,242

(Previous Year: 69,26,128). There is no delay in making payment to Micro, Small and Medium Enterprises and hence

no interest is paid, accrued, due, and payable for the period of delay in making payment as specified under the Act.

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11 Employee Benefits

a) In line with the disclosure requirements under Accounting Standard (AS) 15 (revised 2005) on Employee Benefits, as notified by the Companies (Accounting Standards) Rules, 2006, the relevant details with respect to employee benefits are given here below:

b) The Company has recognized, in the Statement of Profit and Loss for the year ended 31.03.2014, an amount of 2,74,63,923 (Previous Year : 2,70,65,974) expenses under the defined contribution plans, as given below:

Benefit (Contribution to) Previous Year

Superannuation Fund 1,93,39,238

Employee Pension Scheme 77,26,736

2,70,65,974

c) The Company operates post retirement defined benefit plans as follows:

a. Funded

(i) Post Retirement Gratuity

b. Unfunded:

(i) Post Retirement Medical benefits

(ii) Pensions to Directors

d) Details of the Post Retirement Gratuity plan are as follows:

Description Previous Year

1) Reconciliation of opening and closing balances of obligation

a. Obligation as at the beginning of the year 16,95,36,800

b. Current Service Cost 80,50,000

c. Interest Cost 1,37,26,000

d. Actuarial (gain)/loss 2,45,50,000

e. Benefits paid (1,98,65,000)

f. Obligation as at the end of the year 19,59,97,800

The defined benefit obligation at the end of the year is wholly funded by the company.

2) Change in Plan Assets (Reconciliation of opening & closing balances)

a. Fair Value of plan assets as at the beginning of the year 17,87,00,800

b. Expected return on plan assets 1,60,99,000

c. Actuarial gain/(loss) –

d. Contributions 50,00,000

e. Benefits paid (1,98,65,000)

f. Fair Value of plan assets as at the end of the year 17,99,34,800

3) Reconciliation of fair value of assets and obligations at the end of the Year

a. Fair value of plan assets 17,99,34,800

b. Present value of obligation 19,59,97,800

c. Amount recognised in the balance sheet 1,60,63,000

4) Expense recognized in the Year

a. Current service cost 80,50,000

b. Interest cost 1,37,26,000

c. Expected return on plan assets (1,60,99,000)

d. Actuarial (gain)/loss 2,45,50,000

e. Expense recognized in the year 3,02,27,000

The expense is disclosed in Note 15 in line item – Contribution to Provident & Other Funds.

5) Investment Details

The full amount has been invested in cash accumulation scheme of Life Insurance Corporation of India.

6) Assumptions 31.03.13

a. Discount rate (per annum) 8.00%

b. Estimated rate of return on plan assets (per annum) 9.40%

c. Rate of escalation in salary (per annum) 5.00%

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Current Year

2,06,27,597

68,36,326

2,74,63,923

Current Year

19,59,97,800

94,73,210

1,47,31,680

(68,29,760)

(2,37,02,775)

18,96,70,155

17,99,34,800

1,60,68,320

–

57,12,140

(2,37,02,775)

17,80,12,485

17,80,12,485

18,96,70,155

1,16,57,670

94,73,210

1,47,31,680

(1,60,68,320)

(68,29,760)

13,06,810

31.03.14

9.25%

9.40%

5.00%

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e) Details of non-funded post retirement defined benefit obligations are as follows:

Previous Year

Description

1) Reconciliation of opening and Medical Ex-MD

closing balances of obligation Pension

a. Obligation as at the beginning 5,93,67,640 3,32,10,690

of the year

b. Current Service Cost 8,54,000 -

c. Interest Cost 49,69,360 27,44,000

d. Actuarial (gain)/loss 43,82,000 1,17,40,310

e. Benefits paid (31,70,000) (25,98,000)

f. Obligation as at the end of the year 6,64,03,000 4,50,97,000

2) Expense recognized in the year

a. Current service cost 8,54,000 -

b. Interest cost 49,69,360 27,44,000

c. Actuarial (gain)/loss 43,82,000 1,17,40,310

d. Expense recognized in the year 1,02,05,360 1,44,84,310

The expense amounting to Medical : (16,68,000) (Previous Year : 1,02,05,360) and Ex-MD Pension :

(7,14,000) (Previous Year : 1,44,84,310) are disclosed in Note 15 under the line item - Staff Welfare

Expenses.

3) Assumptions Medical31.03.13

a. Discount rate (per annum) at the beginning of the year 8.60%

b. Discount rate (per annum) at the end of the year 8.00%

c. Medical costs inflation rate 5.00%

d. Average Medical Cost ( )/person) 1100

e. Effect of 1% change in health care cost, on

1% Increase

- aggregate current service and interest cost 66,04,000

- closing balance of obligation 87,11,840

1% Decrease

- aggregate current service and interest cost (50,66,000)

- closing balance of obligation (72,09,680)

f) The estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority,

promotions and other relevant factors.

g) Amounts for the current and previous

three years are as follows: 31.03.13 31.03.12 31.03.11

(i) Gratuity (Funded)

Defined benefit obligation 19,59,97,800 16,95,36,800 17,06,25,210

Plan assets 17,99,34,800 17,87,00,800 16,11,73,730

Surplus / (deficit) (1,60,63,000) 91,64,000 (94,51,480)

Experience adjustments on plan assets - - -

Experience adjustments on plan liabilities (1,74,25,000) (6,71,950) (17,52,760)

(ii) Post Retirement Medical Benefits 31.03.13 31.03.12 31.03.11

Defined benefit obligation 6,64,03,000 5,93,67,640 5,83,02,410

Plan assets - - -

Surplus / (deficit) (6,64,03,000) (5,93,67,640) (5,83,02,410)

Experience adjustments on plan assets - - -

Experience adjustments on plan liabilities (38,540) (29,93,260) 25,27,150

The above information has been certified by the actuary and has been relied upon by the Auditors.

Current Year

Medical Ex-MD

Pension

6,64,03,000 4,50,97,000

9,88,000 -

51,69,000 34,96,000

(78,25,000) (42,10,000)

(35,87,359) (27,86,400)

6,11,47,641 4,15,96,600

9,88,000 -

51,69,000 34,96,000

(78,25,000) (42,10,000)

(16,68,000) (7,14,000)

Medical31.03.14

8.00%

9.25%

5.00%

1155

71,17,000

70,69,970

(53,83,000)

(59,83,570)

31.03.14

18,96,70,155

17,80,12,485

(1,16,57,670)

-

(81,26,000)

31.03.14

6,11,47,641

-

(6,11,47,641)

-

(9,76,880)

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TRL

h) Provident Fund

(a) In keeping with the Guidance on implementing Accounting Standard (AS) 15 (Revised) on Employee

Benefits notified by the Companies (Accounting Standards) Rules, 2006, employer established provident

fund trusts are treated as Defined Benefit Plans, since the Company is obliged to meet interest shortfall, if

any, with respect to covered employees. The interest shortfall, if any, is calculated on the actual basis and

provided in the accounts.

(b) The company has contributed 2,42,27,289 (Previous Year : 2,17,52,625) towards provident fund.

12 Related Party Disclosures

LIST OF RELATED PARTIES OF TRL KROSAKI REFRACTORIES LIMITED

Sl. Related Party Country

No.

A Holding Company

Krosaki Harima Corporation Japan

B Subsidiary through Krosaki Harima Corporation, Japan

1 Krosaki Harima Cera Corporation Japan

2 SN Refratecture Tokai Co. Ltd. Japan

3 Shin-Nippon Thermal Ceramics Corporation Japan

4 Higashihama Sangyo Corporation Japan

5 Ariake Material Limited Japan

6 Krosaki Harima (Shanghai) Enterprise Management Co. Ltd. China

7 Wuxi Krosaki Sujia Refractories Co. Ltd. China

8 Yingkou Krosaki Refractory Co. Ltd. China

9 Wuxi Krosaki Machinery Co. Ltd. China

10 Shenyang NEU-Krosaki Refractory Co. Ltd. China

11 Qinhuangdao Shougang Krosaki Refractories Co. Ltd. China

12 Beijing Dongzu Xinye Kemao Co. Ltd. China

13 Krosaki Amr Refractarios, S.A. Spain

14 Krosaki Harima Europe B.V. Netherland

15 Krosaki USA Inc. USA

16 Krosaki Magnesita Refractories, LLC. Brazil

C Associate through Krosaki Harima Corporation, Japan

1 Kikutake Sangyo Corporation Japan

2 Chugoku Chikuro Corporation Japan

3 Maejima Kogyo Corporation Japan

4 Godo Ceramics Corporation Japan

5 Jinan Xinbao Refractories Co. Ltd. China

6 Dandong Harima Refractories Co. Ltd. China

7 Yingkou Krosaki Toshin Minerals Co. Ltd. China

8 Shanghai Baoyejianshe Industrial Furnace Engineering & Technology Co. Ltd. China

9 Yingkou Kyushu Refractories Co. Ltd. China

10 Australia Krosaki CIC Australia Pty. Ltd. Australia

11 IFGL Exports Limited India

D Promoters holding more than 20%

Tata Steel Limited India

E Key Management Personnel :

Dr. A. K. Chattopadhyay, Managing Director

Relatives of Key Management Personnel :

Mrs. Supriya Chatterjee

Mrs. Poulomi Kumar

Ms. Rituparna Chatterjee

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13 Transactions with Related Parties

April 12 to Mar 13

I) Purchase of Raw Materials

Holding Company 1,11,28,636

Promoters holding more than 20% 1,46,47,789

II) Purchase of Traded Products


Promoters holding more than 20%

III) Sales

Holding Company 56,60,330


IV) Receiving of Services from

Promoters holding more than 20% 66,56,571

V) Rendering of Services to


Fellow Subsidiaries –

VI) Dividend paid



VII) Royalty

Holding Company –

VIII) Outstanding balances

Debtors



IX) Loans and Advances Given

Holding Company –


X) Advance from Customer


Promoters holding more than 20% –

XI) Creditors



XII) Key Management Personnel

Remuneration paid

Dr. A. K. Chattopadhyay 1,41,36,842

14 Earnings per Share (EPS)

EPS is calculated by dividing the profit attributable to the equity shareholders by the average number of shares

outstanding during the year. The basic and diluted earnings per share has been calculated below;

Previous Year

Apr 12 to Mar 13

a) Profit after tax, Minority Interest and share of 6,51,314

profit of Associates

b) Profit attributable to Ordinary Share Holders 6,51,314

c) No of ordinary Shares of Basic EPS Nos. 2,09,00,000

d) Nominal Value per share 10.00

e) Basic / diluted Earning per Ordinary Share 0.03

Current Year

April 13 to Mar 14

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4,75,41,761

14,32,94,061

43,18,44,300

1,26,69,420

227,46,99,642

92,41,333

97,99,050

2,29,346

1,06,59,000

42,39,360

44,00,285

93,23,963

35,26,36,029

1,37,63,296

1,11,42,225

–

23,03,000

16,75,80,122

2,40,65,373

1,47,70,193

Current Year

Apr 13 to Mar 14

5,22,98,474

5,22,98,474

2,09,00,000

10.00

2.50

Previous Year

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15 Major Components of Deferred Tax Assets and Deferred Tax Liabilities

Previous Year

Apr 12 to Mar 13

i) Deferred Tax Assets `

a) Tax on expenditure allowed on payment basis u/s 43B

of the Income Tax Act 1961. (“the Act”) 4,25,65,138

b) In respect of unpaid royalty u/s 40(a) of the Act. –

c) In respect of provision for doubtful debts and

advances u/s 36(2) of the Act 16,81,398

d) Tax on difference between the amount charged in the books

in respect of Early Retirement Compensation and the deduction

allowed in respect thereof under the Act. 1,40,95,968

5,83,42,504

ii) Deferred Tax Liabilities

On the timing Difference between Book Depreciation and

Income Tax Depreciation 16,69,89,102

Net Deferred Tax Liability 10,86,46,598

16 Summary of Financial Information of Subsidiary Companies (figures- In Crores)

Sl Name of Subsidiary Reporting

No Company Currency change Assets Liabilities (Excluding Before for after Dividend

Rate in Tax Taxation Taxation

subsidiaries)

1 TRL Asia Private CNY 9.6615 63.62 (0.70) 62.99 0.07 - - (0.06) - (0.06) - Singapore

Limited

2 TRL China Ltd. CNY 9.6615 62.76 (26.45) 166.96 130.65 - 222.01 2.11 - 2.11 - China

* Revenue items are arrived using average rate - 1 CNY: 9.2032.

17 Figures in respect of the previous year have been recasted to correspond to groupings of current year.

As per our report on limited review annexed

Current Year

Apr 13 to Mar 14

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3,90,99,864

10,32,743

23,69,914

1,05,49,761

5,30,52,282

14,89,47,370

9,58,95,088

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For and on behalf of the Board




Ex- Capital Reserves Total Total Investments Turnover Profit Provision Profit Proposed Country

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Notes

[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]

TRL Krosaki Refractories Limited

(Formerly Tata Refractories Limited)CIN-U26921OR1958PLC000349

Visit us at: www.trlkrosaki.com, Email:[email protected], Tel:+91 6645 258417, Fax: +91 6645 250243Regd. Office: Belpahar-768218, Dist: Jharsuguda, Odisha, India

th55 ANNUAL GENERAL MEETING-SEPTEMBER 6, 2014

Name of the member (s):

Registered Address:

E-mail Id:

Folio No./Client Id:

DP ID:

I/We, being the holder(s) of _____________________ equity shares of TRL Krosaki Refractories Ltd. hereby appoint

1. Name:______________________________________________________ E-mail ID:________________________________________

Address:____________________________________________________ Signature:___________________________or failing him/her

2. Name:______________________________________________________ E-mail ID:________________________________________

Address:_____________________________________________________ Signature:___________________________or failing him/her

3. Name:______________________________________________________ E-mail ID:________________________________________

Address:_____________________________________________________ Signature:_______________________________________

thas my /our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the at the 55 Annual General Meeting of the Company to be held thon Saturday, 6 September, 2014 at 1.00 P.M. at Registered office and at any adjournment thereof in respect of such resolutions as are indicated

below:

Sr. No. Particulars

ORDINARY BUSINESS

1. To consider and adopt financial statements of the Company for the year ended March 31, 2014 and the report of the Board of Directors and Auditors thereon.

2. To declare dividend.

3. To appoint a Director in place of Mr. Rakesh Kulshreshtha, who retires by rotation and is eligible for reappointment.

4. To appoint a Director in place of Mr. V.S.N. Murty, who retires by rotation and is eligible for reappointment.

5. To appoint a Director in place of Mr. Kiyotaka Oshikawa, who retires by rotation and is eligible for reappointment.

6. To appoint Auditors and fix their remuneration.

SPECIAL BUSINESSS

7. Authority to Directors to borrow in excess of the Paid-up Capital and Free Reserves u/s 180(1)(c) of the Companies Act, 2013.

8. Creation of Charges u/s 180(1)(a) of the Companies Act, 2013.

Signed this _______________________day of __________________2014

Signature of the Shareholder_______________________ Signature of the Proxy holder(s) _____________________

Notes: 1. The proxy need not be a member.

2. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

TRLForm No. MGT-11

PROXY FORM

AFFIX RevenueStamp of

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