b) Refer Note 39 for disclosure of contractual commitments for acquisition of Property, Plant and Equipment.

c) Refer Note 17 for information on Property, Plant and Equipment pledged as security by the Company.

d) Assets pledged as security for term loans availed by an associate company.

The Company has provided pari pasu security of its land at Bharatpur (Gross book value of Rs. 16,964.87 Lacs) against a term loan of Euro. 50 million and overdraft facility of Euro 30 million sanctioned by Bank of Baroda to Titagarh Firema S.pA, an assoaate of the Company.

e) The Company was vested with leasehold land having gross and net carrying value as at March 31, 2024 of Rs 2,759.22 lacs and Rs. 2,388.58 lacs respectively, through erstwhile Cimmco Birla Limited (subsequently Cimmco Limited), since merged with the Company pursuant to order dated September 30, 2020 of Hon’ble National Company Law Tribunal Board with the appointed date as April 1, 2019. The land was allotted on lease for a period of 99 years in 1963. In the year 1998, the said land was erroneously recorded by the revenue department as land belonging to the State, a parcel of which was subsequently allotted to another party. The Company filed a writ petitions before Hon’ble High Court, Madhya Pradesh against the said erroneous allotment of parcel of the land which was set aside. The aggrieved party filed an appeal before Hon’ble Supreme Court which was dismissed in 2018. The Company had submitted an application to the relevant authority for changing the name which was not allowed and an appeal against the same was preferred before SDO. Further, the Company has approached the Hon’ble High Court, Gwalior

for restoration of the Company’s name in the record of rights and complete the mutation proceedings in a time bound manner, since its appeal for the aforesaid was pending for long time with concerned authority. The Hon’ble High Court, Gwalior vide its Order dated May 2, 2023 directed the concerned authority to decide on the Company’s representation within a period of four weeks. Pending action on the aforesaid Order, the Company received a notice issued by District Industry Centre (DIC), Gwalior cancelling the said lease. Subsequently, the Company filed an appeal before the Commissioner Industries, MSME Bhopal, who dismissed the said appeal on October 9, 2023. The Company had preferred an appeal against the same on November 3, 2023 before Principal Secretary, Bhopal which was withdrawn later and a review application was filed in February 2024 with Commissioner Industries, which is pending as on date. In the matter of restoration of name in the record of rights, the concerned authority dismissed the appeal by an order dated May 9, 2023 against which an appeal was filed before Divisional Commissioner. However, the same was dismissed by an order dated December 15, 2023. No suit of recovery has been filed till date by the State and the Company continues to have physical possession of said leasehold land. The Company has also obtained legal opinion which supports its view that the Company continues to enjoy substantial subsisting right of said land which is not yet extinguished.

# Represents 368 Railway Wagons sub leased to Indian Railways. As per Arbitration Award dated July 3, 2019, use of said wagons have been restricted by Indian Railway and Indian Railway has been instructed to give the possession back to the Company, being the sole and benefiaal owner of said wagons. The realisable value of 368 wagons as per management estimate is more than the book value of Rs. 385.12 Lacs.

Information regarding Investment Properties

The Company’s Investment Properties consists of two parcels of land situated at Bharatpur and Malanpur respectively. As at March 31, 2024, fair valuation of the two properties is estimated to be Rs. 1,241.64 Lacs (March 31, 2023: Rs. 1,139.54 Lacs). These valuations are based on valuations performed by an independent valuer who holds recognised and relevant professional qualifications. The fair value was derived using the market comparable approach based on recent market prices and the fair value measurement is categorised within Level-3

The Company has no restrictions on the realisability of its

Investment Properties and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements. There is no income earned or expenditure incurred by the Company in relation to these Investment Properties.

Significant I ncrease/( Decrease) in circle rate of land will result in significant higher/(lower) fair valuation of properties. The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at March 31, 2024 and March 31, 2023 are as shown

(iii) The total cash outflow for leases for the year was Rs. 1,351.54 Lacs (March 31, 2023 Rs. 864.83 Lacs)

(iv) Extension and Termination options :

Extension and termination options are included in the Company’s lease contract. These are used to maximise operational flexibility in terms of managing the assets used in the Company’s operations. The extension and termination options held are exercisable by mutual consent of both the lessor and the lessee.

Note : A Joint Venture named Titagarh Firema Engineering Services Private Limited (“TFESPL”) has been incorporated on September 16, 2023 having Titagarh Rail Systems Limited (“TRSL”) and Titagarh Firema SPA (“Firema”) as Joint Venturers. TFESPL effective October 1,2023 has acquired the Company’s design centre (Classified as held for sale) in Hyderabad and is carrying on the business of research, engineering and design related services to support passenger rail segment business.

* The voluntary winding up of Titagarh Singapore Pte Limited at Singapore has already been initiated in the previous year in accordance with local laws and the same is expected to be completed in the next year. Accordingly, the financial statements of TSPL has been prepared on liquidation basis (fair value).

** Purchased 1,233,000 shares for Rs. 432.57 Lacs; acquired 1,500,000 shares for Rs. 1,207.49 Lacs;

1,900,000 shares received on loan conversion to equity of Rs. 1,608.54 Lacs in the previous year. a Includes 3 million equity shares pledged by the company for the loan taken by TFA from Bank of Baroda U.K branch.

# Quotation not available, since suspended due to penal reason. aa Represents following shares pledged with the banks for the cash credit and working capital facility availed by the company {Also refer note 17(c)} :

used in the assessment would cause the carrying value of investments to exceed its recoverable value.

(ii) Impairment assessment in respect of Titagarh Singapore Pte Limited:-

During the previous year, the Board of Directors of the Company in their meet'ng had approved the liquidation

of TSPL, a wholly owned subsidiary Company, considering that no operations were being carried on in the subsidiary. The process for winding up of the subsidiary in compliance with the local rules and regulations at Singapore is in progress. Accordingly, the financial statements of TSPL has been prepared on liquidation basis (fair value) for the year ended March 31,2024.

@ Pledged with the Commercial Tax Officer, Bharatpur as Security Deposit

(a) Valued at exchange rate prevailing on the date of transaction.

(b) Refer Note 45 for determination of fair values.

(c) Refer Note 46 for credit risk and market risk on investments.

(d) On September 16, 2023 the Company and Titagarh Firema SPA (“Firema’') formed Titagarh Firema Engineering Services Private Limited to carry on the business of research, engineering and design related services to support passenger rail segment business. The Company has invested Rs. 196.00 lacs in TFESPL till March 31,2024.

(e) On June 09, 2023, the Company and Ramkrishna Forgings Limited (“RKFL”) formed a JV, Ramkrishna Titagarh Rail Wheels Limited for manufacturing and supply of forged wheels under long term agreement under Aatma Nirbhar Bharat. The Company has invested Rs. 6,124.88 lacs in RTRWL till March 31,2024.

(f) On January 24, 2024, the Company and Sidwal Refrigeration Private Limited, a wholly owned subsidiary of Amber Enterprises India Ltd, entered into a strategic alliance pursuant whereto they have invested Rs.10,000.00 lacs each in the equity capital of Shivaliks Mercantile Private Limited (SMPL), a joint venture-special purpose vehicle company (Shivaliks/SPV) for making fresh investments into Titagarh Firema SPA (alongwith fresh investment by Invitalia, an investment arm of Government of Italy) and to carry on the business of railway components and subsystems for Rolling Stock. SMPL holds 35.12% of the equity share capital of Titagarh Firema SPA as at March 31, 2024. Further, post such infusion, the Company holds 25.43% equity shares in Titagarh Firema S.p.A. In accordance with IND AS-28 “Investment in associates and Joint venture”, considering the terms of “Share Subscription Agreement” like representation in the board of directors, voting rights

etc the SMPL becomes a joint venture of the Company with effect from February 13, 2024, the date on which final subscription money was paid by the Company.

(g) (i) Impairment assessment in respect of Titagarh Firema S.p.A and Shivaliks Mercantile Private Limited:-

During the year ended March 31, 2024, the Company considered indicators of impairment such as operational performance, changes in outlook of future profitability among other potential indicators for investments held in Shivalik Mercantile Private Limited (SMPL) and Titagarh Firema S.p.A (TFA). The recoverable value of investments held in SMPL, a joint venture of the Company is dependent on the operational and financial performance of TFA, an associate of the Company. The recoverable amount of TFA is based on fair value less cost to sell. The fair value computation uses cash flow forecasts based on most recently approved financial budgets, strategic forecasts and future projections taking the analysis out into perpetuity based on a steady state, sustainable cash flow reflecting average industry conditions. Key assumptions for the computations are those regarding the discount rates, exchange rates, improvement in margin on account of rise in economies and cost optimisation etc. The Company estimates discount rates using post-tax rates that reflect the current market rates. The weighted average post-tax discount rates used for discounting the cash flows projections is 11.10% (March 31,2023: 11.14% and 13.83% as a subsidiary and as an associate respectively). Beyond the specifically forecasted period, a growth rate of 1% (March 31,2023: 1%) is used to extrapolate the cash flow projections. The outcome of the impairment assessment resulted in no such impairment loss as at year-end.

The Company has also conducted sensitivity analysis on the impairment tests at year end including sensitivity in respect of discount rates. The management believes that no reasonably possible change in any of the key assumptions

@ During the year following new equity shares were issued:

1) Pursuant to approval by the Board of Directors and the Shareholders of the Company in their meetings held on June 10, 2023 and July 04, 2023 respectively, and approval of Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), the Audit Committee as authorised by the Board of Directors, allotted 76,00,000 Equity Shares on Preferential basis to Smallcap World Fund Inc, a SEBI Registered FPI, at a price of Rs. 380 per share (Face Value: Rs. 2 each fully paid up) including premium of Rs.378 per share. The Company received listing approval from BSE and NSE on July 19, 2023 and July 20, 2023 respectively and trading approval on July 25, 2023. These allotted equity shares were under lock-in for six months from the date of trading approval as per existing regulations.

2) Pursuant to approval of the Board of Directors and the shareholders of the Company on November 08, 2023 and December 02, 2023 respectively, and approval of Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), the Qualified Institutions Placement Committee as authorised by the Board of Directors, allotted 75,02,679 equity shares by way of Qualified Institutional Placement (QIP) at a price of Rs. 933 per share (Face Value: Rs. 2 each fully paid up) including premium of Rs. 931 per share. The Company received listing and trading approval from BSE and NSE on December 13, 2023 and December 14, 2023 respectively.

In accordance with IND AS 32, the costs that are directly attributable to the above transactions, have been adjusted in equity.

Proceeds from issue of equity shares made during the year have been used utilised in the following manner:

b) Terms and Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 2/- (March 31, 2023: Rs. 2/-) per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earning includes Remeasurements (Gain) / Loss on defined benefits plan, net of taxes that will not be reclassified to Statement of Profit and Loss.

16.4 Cash Flow Hedge Reserve:- The Company has designated certain foreign currency forward contracts as cash flow hedges in respect of foreign exchange risks. The cumulative effective portion of gains or losses arising from changes in fair value of hedging instruments designated as cash flow hedges are recognised in cash flow hedge reserve. Such changes recognised a re reclassified to the statement of profit and loss when the hedged item affects the profit or loss or are included

as an adjustment to the cost of the related non-financial hedged item.

16.5 During the year, ineffective portion of cash flow

hedges recognised in the statement of profit and loss amounted to Rs. Nil (March 31, 2023: Rs. Nil).

The amount recognised in cash flow hedge reserve (net of tax) is expected to impact the statement of profit and loss as below:

- within the next one year: gain Rs.(13.25) Lacs (March 31, 2023: Rs. (28.35) Lacs)

- later than one year: gain Rs. Nil Lacs (March 31, 2023: Rs. Nil Lacs)

16.1 Securities Premium Account:- Premium received on Equity Shares issued are recognised in the Securities Premium Account. This reserve may be utilised in accordance with the provisions of Section 52 of the Act.

16.2 General Reserve:- Under the erstwhile Indian Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013,

Notes:

(a) Term Loan of Rs. 4,974.48 Lacs (March 31, 2023: Rs. 4,962.50) carrying interest @ 9.05 % p.a. (March 31, 2023: 9.05 % p.a.) linked to 1 year MCLR has been availed during the previous year and is repayable in 16 equal quarterly installments from April 2024 to January 2028. Above term loan was secured by way of first charge over land at Gwalior district, Madhya Pradesh owned by the Company. Charge is yet to be created over such land.

(b) Term Loan of Rs. NIL lacs (March 31, 2023: Rs. 3,286.13 Lacs) carried interest @ 8.92% to 9.16% p.a (March 31, 2023: 7% to 10.23% p.a.) linked to 1 year MCLR and was repayable in 7 quarterly installments starting from June 2022 to December 2023. Above term loan has been repaid in full during the year. It was secured by a first pari-passu charge by way of mortgage upon all fixed assets including land and building, plant and machinery and other movable/immovable assets at Company’s Bharatpur Plant. The loan was further secured by the second charge on the Company’s current assets relating to Bharatpur Plant.

(c) Cash Credits and Working Capital Demand Loans of Rs. NIL lacs (March 31, 2023: Rs. 14,639.27 lacs) were

secured by first charge on the company’s current assets, movable fixed asset both present and future and further charge was created on immovable properties of the company by deposit of title deed except immovable properties at Bharatpur, Rajasthan, Gwalior and Bhind District, Madhya Pradesh, Falta and Kulpi, West Bengal. Further in the consortium meeting held on February 16, 2024, it was decided and agreed to create first charge over current assets and second charge over fixed assets except immovable properties held at Bharatpur, Rajasthan, Gwalior and Bhind District, Madhya Pradesh, Falta and Kulpi, West Bengal, which is currently being implemented with consortium bankers. The above facilities have also been secured by way of pledge of investment in equity shares of Titagarh Enterprises Limited and Titagarh Industries Limited. All the mortgages and charges created in favour of the above lenders rank Pari passu with consortium member banks.

(d) Cash Credits is repayable on demand and carry an interest rate ranging between 8.45% to 11.50% p.a. (March 31, 2023: 8.70% to 13.60%) linked with MCLR.

(e) Working Capital Demand Loans carry interest ranging from 5.75% to 11.50% p.a. (March 31, 2023: 5% to 13% p.a.) and are repayable on demand.

(f) Buyers Credit carry an interest rate of 6.78% p.a. (March 31, 2023: 5.20 % p.a. ) and is linked to Secured Overnight Financing Rate (SOFR). The same is repayable by April 19, 2024.

(g) As at March 31, 2024, the register of charges of the Company as available in records of the Ministry of Corporate Affairs (MCA) includes charges that were created/modified for entities which got amalgamated into the Company pursuant to National Company Law Tribunal Orders in earlier years. There are certain charges which are historic in nature and it involves practical challenges in obtaining no-objection certificates (NOCs) from the charge holders of such charges, despite repayment of the underlying loans. Further, certain

charges wherein the outstanding loans have been repaid and the Company has also filed the related Form 17 for satisfaction of Charge in respect thereof in earlier years, but the same has not been updated in the MCA records. The Company is following up these matters and is in the continuous process of filing the charge satisfaction e-form with MCA, within the timelines, as and when it receives NOCs from the respective charge holders. Further in case of new term loan obtained during the previous year, the Company is yet to file charges with MCA.

(h) Term Loans obtained in earlier years have been applied for the purpose for which it has been obtained.

(i) Refer Note 46 for information about market risk and liquidity risk on borrowings.

Information about individual provisions and significant estimates

(i) Warranties

Provision is made for estimated warranty Claims in respect of products sold which are under warranty at the end of the reporting period. The warranty period ranges between 2 to 3 years. Management estimates the provision based on contractual terms, historical warranty claims information and any recent trends that may suggest future claims could differ from historical amounts.

(ii) Loss on Onerous Contract

Provision is made for contracts in which the unavoidable

costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Management estimates the provision based on contractual terms and the present obligation under the contract is recognised and measured as a provision.

(iii) Litigation, claims and contingencies

The amounts represent best possible estimates of pending litigations / claims filed by vendors, customers, labours etc and probable claims arising out of certain tax matters. The timing and probability of outflow and expected reimbursements, if any, with regard to these matters depends on the ultimate outcome of the legal process or settlement / conclusion of the matter with the relevant authorities / customers / vendors etc.

# Derivative instruments used by the Company is in nature of forward exchange contracts. These financial instruments are utilised to hedge future transactions and cash flows and are subject to hedge accounting under Ind AS 109 “Financial Instruments” wherever possible. The Company does not hold or issue derivative financial instruments for trading purposes. All transactions in derivative financial instruments are undertaken to manage risks arising from underlying business activities. All the instruments are hedge effective as at year end.

(a) Arbitration was invoked following the dispute between Cimmco Limited (since merged into the Company) and Texmaco Rail Engineering Limited (Texmaco) in respect

of breach of the agreement authorising Texmaco to use the designs for main body work and integral frame of non-pressurised bulk powder cement wagons (BCCW Wagons) for a fixed term. The arbitration result was awarded in favour of the Company dated June 20, 2022. Texmaco filed a petition for stay, challenging the said award before the High Court at Calcutta. An order of interim stay of execution of the award has been made, upon Texmaco depositing a sum of Rs. 1,500.00 lacs with the Registrar. The Company filed an application for withdrawing the said sum deposited by Texmaco in lieu of bank guarantee furnished by it and received the amount of Rs. 1,500.00 lacs on June 15, 2023.

36 Employee Benefits:

(i) Post-employment Defined Benefit Plans:

Gratuity

The Company has a defined benefit gratuity plan which is unfunded (except for one unit where it is administered through a trust and funded with a bank through its special deposit scheme with State Bank of India). Every employee who has completed five years or more of service is entitled to gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(ii) Post-employment Defined Contribution Plans:

Provident Fund and Employee State Insurance Scheme (ESI)

Certain categories of employees of the Company receive benefits from a provident fund and ESI, a defined contribution plan. Both the employee and employer make monthly contributions to a government administered fund at specified percentage of the covered employee’s qualifying salary. The Company have no further obligations under the plan beyond its monthly contributions.

Assumptions regarding future mortality experience are based on mortality tables of Indian Assured Lives Mortality (20122014) published by the Institute of Actuaries of India.

The estimate of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

The Company expects to contribute Rs. 12.82 Lacs (March 31,2023: Rs. 71.76 Lacs) to the funded gratuity plans during the next financial year.

(iii) Leave Benefits

The Company provides for accumulation of leave by its employees. The employees can carry forward a portion of the unutilised leave balances and utilise it in future periods or receive cash in lieu thereof as per the Company’s policy. The Company records a provision for leave benefits in the period in which the employee renders the services that increases this entitlement. This is an unfunded plan.

The total provision recorded by the Company towards these benefits as at year end was Rs. 101.54 Lacs (March 31, 2023: Rs. 136.09 lacs). The amount of the provision is presented as current, since the Company does not have an unconditional right to defer settlement for any of these benefits. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 1 2 months.

(iv) Risk Exposure

Through its defined benefit plans, the Company is exposed to some risks, the most significant of which are detailed below:

(a) Discount Rate Risk

The Company is exposed to the risk of fall in discount rate. A fall in discount rate will eventually increase the ultimate cost of providing the above benefit thereby increasing the value of the liability.

(b) Salary Growth Risks

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

(c) Demographic Risk

In the valuation of the liability, certain demographic (mortality and attrition rates) assumptions are made. The Company are exposed to this risk to the extent of actual experience eventually being worse compared to the assumptions thereby causing an increase in the benefit cost.

37 The Board of Directors of the Company at its meeting held on March 21,2023 approved the Employee Stock Option Scheme titled “Titagarh Rail Systems Limited Employees Stock Options Scheme, 2023” for the employees of the Company and its subsidiary and associate. Subsequently, on April 26, 2023, the shareholders, by way of postal ballot approved the said Scheme. No employee stock options have been granted to employees under the Scheme as at March 31, 2024.

Company) had prior to year 2000, obtained certain advance licenses for making duty free import of inputs subject to fulfillment of export obligation (EO) within the specified time limit/extended time limit (as extended pursuant to sanctioned scheme of BIFR) from the date of issuance of such licenses. However, in absence of complete list of licenses along with the imports made against each license, the amount of contingent liability towards custom duty saved on unfulfilled export obligations and penal interest if any, is presently unascertainable.

(b) SBI Caps has raised a claim of Rs. 1,128.95 lacs on erstwhile Cimmco Limited (since merged with the Company) on account of disallowance of depreciation by the income tax authorities on the wagons leased by SBI Caps to erstwhile Cimmco Limited (since merged with the Company)

which in turn has been sub leased to Indian Railways. The same pertains to the assessment year 1998-99 to 2004-05 (period prior to change of management in terms of the BIFR order) and the matter is pending with ITAT Mumbai. As per the separate lease agreements entered between SBI CAPS, erstwhile Cimmco Limited (since merged with the Company) and Indian Railways, any claims, charges, duties taxes and penalties as may be levied by the Government or any other authority pertaining to leased wagons shall be borne by the Indian Railways. Considering the above terms contained in the above agreements and also favorable ITAT judgments regarding the admissibility of the depreciation on the leased assets, the Company believes that there would not be any liability that would crystallise on account of the

* Includes Rs 1,360.45 Lacs (March 31, 2023: Rs. 1,360.45 Lacs) which in terms of BIFR order, even if decided against the Company, would stand at Rs 136.04 Lacs (March 31, 2023 : Rs 136.04 Lacs) only.

In respect of above cases based on favorable decisions in similar cases/legal opinions taken by the Company/ discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has

been made in the financial statements.

In respect of above contingent liabilities, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above.

(ii) Further:

(a) Erstwhile Cimmco Limited (Since merged with the

The above particulars, as applicable, have been given in respect of MSEs to the extent they could be identified on the basis of the information available with the Company.

* Includes dues of micro and small enterprises (MSE) included within other financial liabilities.

42 List of Subsidiaries, Associate and Joint Ventures of the Company

The Company has following Subsidiaries, Associate and Joint Ventures for which the Company prepares Consolidated Financial Statements as per Ind AS 110 “Consolidated Financial Statements”. Investment in these subsidiaries, associate and joint ventures has been recognised at cost.

* The voluntary winding up of Titagarh Singapore Pte Limited at Singapore has already been initiated in the previous year in accordance with local laws and the same is expected to be completed in the next year. Accordingly, the financial statements of TSPL has been prepared on liquidation basis (fair value).

** The Company holds 100% equity in TWA together with a wholly owned subsidiary company, TSPL. However, since TWA is

43. SEGMENT INFORMATION

The operating segments based on the Company’s products has been identified by the chief operating decision maker, being the Board of Directors, as “Freight Rail Systems” and “Passenger Rail Systems”

a) Freight Rail Systems - Consists of manufacturing of Wagons, Loco Shells, bogies, couplers, its components, designing and construction of Warships, Passenger Vessels, Tug and specialised equipment’s for Defence, Bridge Girders etc.

b) Passenger Rail Systems - Consists of designing and manufacturing of Metro, Passenger Coaches, EMUs, Train Sets, Mono Rail, Propulsion equipment, Traction Motors and its components.

Segment performance is evaluated based on profit or loss and is measured consistently with Profit or Loss in the Standalone Financial Statements . Also, the Company’s borrowings (include finance costs) , income taxes, investments and derivative instruments are managed at head office and are not allocated to operating segments.

Segment Revenue is measured in the same way as in the Statement of Profit and Loss.

Segment Assets and Liabilities are measured in the same way as in the standalone financial statements.

These asset and liabilities are allocated based on the operations of the segment and physical location of assets.

Non-current operating assets

(b) All non-current assets (excluding Financial Assets) of the Company are located in India.

(c) Total revenue from external customers includes sales to Indian Railways of Rs 171,030.68 Lacs (March 31, 2023: Rs 172,441.14 Lacs), Rungta Sons Pvt Ltd of Rs. 66,517.21 Lacs (March 31, 2023: 12,093.13 Lacs) and Maharashtra Metro Railway Corporation Rs 41,775.41 Lacs (March 31, 2023: Rs 52,462.98 Lacs) which represents more than 10% of the total revenue from external customers of the Company.

a) Terms and conditions of transactions with related parties

Transactions relating to dividend were on the same terms and conditions that applied to other shareholders. The sales / services to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest-free and settlement occurs in cash.

The remuneration to key managerial personnel does not include provisions made for gratuity and leave benefits as they are determined on an actuarial basis for the Company as a whole.

c) The Company has provided letter of Financial support to one of its joint venture namely Titagarh Mermec Private Limited.

d) Also refer Note 6.1 (d) to the standalone financial statements.

45. Fair Values

(i) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows below.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-

the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.

The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. There are no transfers between level 1 and level 2 fair value measurements during the year ended March 31,2024 and March 31, 2023.

The following table provides the fair value measurement hierarchy of the Company’s assets:

The methods and assumptions were used to estimate the fair values:

(a) The fair value of foreign exchange forward contracts is determined using forward exchange rates at the Balance Sheet date.

(b) The management assessed that the fair values of remaining financial assets and liabilities at amortised cost approximate to their carrying amounts largely due to the short-term maturities of these instruments.

(c) For financial assets / liabilities carried at fair value, the carrying amounts are equal to their fair values.

(d) Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimate technique. Therefore, for substantially all financial instruments, the fair value estimates are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

46. Financial Risk Management Objectives and Policies

The Company’s financial liabilities comprise borrowings, trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s financial assets include trade and other receivables, cash and cash equivalents, investments and other financial assets.

The Company’s Board of Directors ensures that risks are identified, measured and managed in accordance with Risk Management Policy of the Company and also reviews these risks and related risk management policy, which are summarised below.

I) Market Risks

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign currency risk and other price risk, such as equity price risk and interest rate risk. Financial instruments affected by market risk include FVTPL investments, trade payables, trade receivables, borrowings, other receivables etc.

(i) Foreign currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities and borrowings. Such foreign currency exposures are primarily hedged by the Company through use of foreign exchange forward contracts. The Company has a treasury team which continuously monitors the foreign exchange fluctuations on a continuous basis and advises the management of any material adverse effect on the Company, and any additional remedial measures to be taken.

The Company’s foreign currency exposure at the end of the reporting period are as follows:

(iv) Fair value of financial assets and liabilities

The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in orderly transaction

between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used for the year ended March 31, 2023.

(ii) Equity price risks

Equity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in equity prices (other than those arising from interest rate or foreign exchange rate risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or by factors affecting all similar financial instruments traded in the market.

The Company only invests in the equity shares of the subsidiaries, associate, joint ventures and some of the group companies as part of the Company’s overall business strategy and policy. The Company manages the equity price risk through placing limits on individual and total equity investment in each of the subsidiaries, associate, joint ventures and group companies based on the respective business plan of each of the companies. Reports on the investment portfolio along with the financial performance of the subsidiaries, associates, joint ventures and group companies are submitted to the Company’s management on a regular basis. The Company’s Board of Directors reviews and approves all

II) Credit Risks

Credit Risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and loans / deposits) and from its investing activities (primarily deposits with

banks). The Company’s maximum exposure to credit risk for the components of the Balance Sheet as at March 31,2024 and March 31,2023 is their carrying amounts except for the financial guarantees.

(a) Trade receivables and contract assets

Customer credit risk is managed by the Company through esta blished policy and procedures and

controls relating to customer credit risk management. The Company applies the simplified approach to determine the expected credit loss (ECL) for trade and other receivables by considering historical credit loss experience further adjusted for forward looking information. In addition Company also considers allowance for credit loss for trade and other receivable based on specific identification method on a case to case basis with reference to the customer’s credit quality,

prevailing market conditions etc. To calculate expected credit loss, the Company groups its trade receivables by category of customers i.e. passenger rolling stock, freight rolling stock, shipbuilding, bridges and defence and related parties. The Company has evaluated that the historical loss rate for passenger rolling stock, freight rolling stock and related party receivables is Nil. In respect of receivables from shipbuilding, bridges and defence, the historical loss rate is given below:

The impairment provision as disclosed above are based on assumptions a bout risk of default and expected credit loss rates. The Company uses judgement in making these assumptions based on the Company’s past history, counter party’s ability to pay, existing market conditions as well as forward looking estimates at the end of each reporting period.

The Company has recorded bad debts of Rs. Nil lacs (March 31,2023: Rs. 165.81 lacs), being not realisable from customers.

III) Liquidity Risks

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposits, which carry no market risk. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash credits, bank loans among others.

(b) Other Financial Assets and Deposits

Credit Risk from Balances with Banks, deposits, etc is managed by the Company’s finance department. Investments of Surplus funds are made only with approved counterparties which have high credit worthiness in accordance with the Company’s policy and hence the credit risk is limited

46.1 The Company does not have any material foreseeable losses on long term contracts. Further the net losses on derivative contracts during the year have been recognised in the financial statements in keeping with Company’s accounting policy.

47. Capital Management (a) Risk Management

The Company’s objective when managing capital (defined as net debt and equity) is to safeguard the Company’s ability to continue as a going concern in

order to provide returns to shareholders and benefits for other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Company.

The Company monitors capital on the basis of the net debt to equity ratio. Net debt are borrowings as reduced by cash and cash equivalents. The Company is not subject to any externally imposed capital requirements.

Proposed Dividend

The Board of Directors of the Company recommended a dividend of Rs. 0.80/- per Ordinary (Equity) Share of Rs. 2/- each (40%) to the shareholders of the Company for the financial year 2023-24. The dividend recommended by the Board of Directors of the Company is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company. The dividend, if approved by the shareholders at the AGM, will be paid, subject to deduction of tax at source.

49.1 The aggregate amount of the transaction price allocated to the remaining performance obligation, which are partially or fully unsatisfied as at year end is Rs. 659,865.85 lacs (March 31,2023 : Rs. 93,230.84 lacs) and the entity will recognize this revenue as the contract is completed and / or executed, which is expected to occur over the next 12—68 months.

Trade receivables in respect of contract with customers has been included in Note 11

50. Scheme of Amalgamation

The Board of Directors of the Company at its meeting held on January 10, 2022 approved the Scheme for amalgamation (“"the Scheme””) of Titagarh Bridges and International Private Limited (TBIPL) - a wholly owned subsidiary with the Company, pursuant to Sections 230 to 232 of the Companies Act, 2013 with April 01, 2021 as the Appointed Date. The Hon’ble National Company Law Tribunal (NCLT), Kolkata vide its order dated October 26, 2022 approved the Scheme. In terms of the Scheme, no consideration has been paid and the equity shares and optionally fully convertible debentures held by the Company in TBIPL stands cancelled.

In the previous year, the Company accounted for the above merger in accordance with Appendix C - (Business combinations of entities under common control) of Indian Accounting Standard (Ind AS) 103, Business Combinat'ons, other accounting principles prescribed under the Companies (Indian Accounting Standards) Rules, 2015 as not'fied under section 133 of Companies Act, 2013 and relevant clarifications issued by the Institute of Chartered Accountants of India with effect from April 1,2021 and as also approved in the scheme by NCLT.

51. The Company has evaluated the impact of the Supreme .Court Judgment in case of “Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal” and the related circular (Circular No. C-I/1 (33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees’ Provident Fund Organisat'on in relat'on to non-exclusion of certain allowances from the definition of “basic wages” of the relevant employees for the purposes of determining contribution to provident fund under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 and in the assessment of the management, the exposure is not material.

52. (i) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iii) Relationship with struck off companies

The Company has no transact'ons with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(iv) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(v) Compliance with approved scheme(s) of arrangements The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year, other than as disclosed in Note 50

(vi) Utilisation of borrowed funds and share premium:-

(A) The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries other than funds aggregating to Rs.10,000.00 lacs invested by the Company in Shivaliks Mercantile Private Limited (SMPL) for onward investments in Titagarh Firema S.p.A. (TFA) of which Rs. 9,013.10 lacs had been invested by SMPL in TFA by year ended March 31,2024. This arrangment is in accordance Share Subscription agreement dated January 24, 2024 between Sidwal Refrigeration Industries Private Limited, Titagarh Rail Systems Limited, Shivaliks Mercantile Private Limited and Shri. Umesh Chowdhary.

(B) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. Provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(vii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(viii) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(ix) Valuation of PPE, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(x) The Company does not have any Core investment companies as a part of the group.

54. Research and Development expenditure of revenue nature recognised in Profit and Loss during the year amounts to Rs. 144.36 lacs (March 31, 2023 : 301.84 lacs).

55. The board at its meeting held on March 17, 2023 approved change of name of the company to Titagarh Rail Systems Limited to better reflect the current business activities and after shareholders approval obtained on April 27, 2023 the necessary forms were filed with MCA. The approval for the same was received and the name change was effective from May 19, 2023.

56. The Code on Social Security, 2020 ('Code’) relating to employee benefits during employment and post employment received Indian Parliament approval and Presidential assent in September 2020. The Code has been published in the Gazette of India and subsequently on November 13, 2020 draft rules were published and invited for stakeholders’ suggestions. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.