NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2016 1 Figures for the brvious year have been re-grouped, wherever necessary to conform to current year classification. 2. Accounting policies / compliance of Accounting Standards issued by the Institute of Chartered Accountants of India (1) AS 1: Disclosure of accounting policies The accounts are maintained on accrual basis as a going concern. (2) AS 2: Valuation of inventories nventories are valued at lower of cost or net realisable value. Cost is ascertained on weighted average basis in accordance with the method of valuation brscribed by the Institute of Chartered Accountants of India. Raw materials are valued at cost of purchase and includes all expenses incurred in bringing the materials to location of use. Work-in-process and finished goods include conversion costs in addition to the landed cost of raw materials. (3) AS 3: Cash flow statement Cash flow statement is attached to the balance sheet and statement of profit and loss. (4) AS 4: Contingencies and Events occurring after Balance sheet date There are no significant events occurring after the Balance Sheet date that materially affect the financial statements for the current year. 6) AS 6: Debrciation Accounting The standard is withdrawn with effect from March 30, 2016 and included in AS 10 "Property, Plant and quipment". (7) AS 7: Accounting for Construction Contracts The above standard is not applicable to the Company as it is not engaged in the business of construction. (8) AS 8: Accounting for Research and Development This Standard was withdrawn with effect from 1-4-2003 consequent to Accounting Standard AS 26 on Accounting for Intangible Assets becoming mandatory. (9) AS 9: Revenue recognition Income of the company is derived from sale of products and includes excise duty and is net of sales returns, trade and cash discounts. Revenue is recognized when the risk and reward in the goods pass on to the customer. As per the terms of the contract with some customers, risk and reward pass on to them when the goods are dispatched to them through designated logistics. In other cases the risks and rewards pass on to them only when the goods were inwarded by them. Accordingly revenue is recognized at that point of time. Export sales are recognized on the basis of 'on board' bills of lading and on the dates of 'LET' export certificate. Export benefits are recognized on post shipment basis. Revenue and expenditure are accounted on a going concern basis. Interest incomes / expenses are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established as on the Balance Sheet date. (10) AS 10: Property, Plant and Equipment Debrciation is provided on Straight Line Method based on the useful life defined in the Schedule II of the Companies Act, 2013, except in respect of certain category of plant and equipments, where useful life is different than those brscribed under shcedule II. In respect of these assets, the useful life has been determined based on technical assessments. Component Accounting - Useful life of whole asset and part of the asset: There is no significant variance in the useful life between the component of assets (whose cost is significant in relation to total cost of respective assets) and the useful life of respective assets. Hence, the debrciation has been computed for the whole of assets. The gross blocks of fixed assets are shown at the cost of acquisition, which includes taxes, duties (net of excise duty credit availed ) and other identifiable direct expenses incurred upto the date the asset is put to use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. (11) AS 11: Accounting for the effects of changes in foreign exchange rates Transactions on account of import of raw materials and other inputs are accounted based on the actual liability incurred if the transactions are settled within the accounting year. Such transactions not settled during the accounting year are accounted on rates brvailing on close of the accounting year. Export sales are accounted at rates brvailing on the date of shipment(Transaction date). Exchange difference between the actual realization and value arrived based on the transaction rate are accounted as Other Income. Non - monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction. Gain or loss arising due to repayment or restatement of liabilities incurred for the purpose of acquiring fixed assets have been recognised in the statement of profit and loss. Net exchange difference is recognised in the Statement of Profit and Loss - loss of Rs. 2,092.90 lakhs (Rs. 5,887.47 lakhs loss in the brvious year). (12) AS 12: Accounting for Government grants The Company has not received any grant from the Government during the year. (13) AS 13: Accounting for Investments (a) Investments are accounted at the cost of acquisition which includes stamp fees, etc. Long term investments are carried at cost. Diminution in the market value of long term investments is provided for only when there is a permanent diminution in the value of such investments. (b) The investments have been held by the Company in its own name except to the extent of exemption granted under Section 187 of the Companies Act, 2013 in respect of shares held in subsidiary companies through the nominees. (c) Investments in Sundram Fasteners (Zhejiang) Limited, Zhejiang, People's Republic of China and Cramlington Precision Forge Limited, Northumberland, United Kingdom were transfererred to Sundram International Limited, New Castle, United Kingdom. (14) AS 14: Accounting for amalgamations This Standard is not applicable as there was no amalgamation during the year. (15) AS 15: Accounting for Employee Benefits (A) Defined Contribution Plan a. Contribution to Provident Fund is in the nature of defined contribution plan and are made to a recognised fund. b. Contribution to Superannuation Fund is in the nature of defined contribution plan and is remitted to Life Insurance Corporation of India in accordance with the scheme framed by the Corporation. c. Contribution to Defined Contribution Plan, recognised as expense for the year are as under: (i) Employer's Contribution to Provident Fund during the year Rs. 1,007.42 lakhs brvious year Rs. 987.15 lakhs. ii) Employer's Contribution to Superannuation Fund during the year Rs. 69.32 lakhs brvious year Rs. 71.88 lakhs. (B) Defined Benefit Plan (i) Provident Fund The Provident Fund being administered by a Trust is a defined benefit scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to conform to the interest rate declared by the Government for the Employees Provident fund. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that, interest shortfall in respect of provident fund set up by employers are to be met by employer and hence such fund need to be treated as defined benefit plan. There is no liability due to interest shortfall determined under paragraphs 58 & 59 of AS-15 (Revised). (ii) Gratuity Retirement benefit in the form of Gratuity Liability (being administered by Life Insurance Corporation of India) is a defined benefit obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year. The following tables summarise the components of net benefit expenses recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity: (16) AS 16: Borrowing costs Interest on borrowings to finance fixed assets are capitalised only if the borrowing costs are attributable to the acquisition of fixed assets that take a substantial period of time to get ready for its intended use. Expenditure incurred on alteration / temporary constructions is charged off as expenditure under appropriate heads of expenditure in Statement of Profit and Loss in the year in which it is incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. There is no borrowing cost capitalised during the year. (17) AS 17: Segment reporting The Company operates in the single segment (18) AS 21: Consolidated financial statements Consolidated financial statements of the Company and its subsidiaries, viz. a) Sundram Fasteners Investments Ltd., Chennai b) TVS Upasana Limited, (Formerly Upasana Engineering Limited) , Chennai c) Sundram Fasteners (Zhejiang) Limited, Zhejiang, People's Republic of China d) Cramlington Precision Forge Limited, Northumberland, UK e) Sundram Non-Conventional Energy Systems Limited, Chennai f) Sundram International Inc, Michigan, USA g) Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany (Sold / transferred effective 30th March, 2016) h) PUT Grundstucks GmbH, Peine, Federal Republic of Germany (Sold / transferred effective 30th March, 2016) i) Sundram Precision Components Limited, (Formerly Sundram Bleistahl Limited) Chennai j) TVS Peiner Services GmbH (Formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany (Sold / transferred effective 30th March, 2016) k) TVS Infotech Limited, Chennai l) TVS Infotech Inc, Michigan, USA are annexed. (19) AS 22: Accounting for taxes on income Refer Note 4 to the Accounts Tax expense comprises of current and deferred. Current income tax is measured as the amount expected to be paid to the tax authorities in accordance with the Indian Income tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. The company reviews carrying amount of deferred tax assets at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. (20) AS 23: Accounting for Investments in associates in Consolidated Financial Statements Company has no associates as defined in AS 23. (21) AS 24: Discontinuing Operations The Company has not discontinued any operations during the year. (22) AS 25: Interim Financial Reporting Quarterly financial results are published in accordance with the guidelines given by SEBI. The recognition and measurement principles as laid down in the standard are followed with respect to such results. The Quarterly results are also subject to a limited review by the auditors as required by SEBI. (23) AS 26: Intangible Assets The Company has not acquired any intangible asset during the year. With respect to fees paid for acquiring Technical Know how before 01-04-2003, the amount capitalised has been amortised over the currency of the collaboration agreement. (24) AS 27: Financial Reporting of Interests in Joint Ventures Company has no joint venture as defined in AS 27. (25) AS 28: Impairment of Assets At the Balance Sheet date, an assessment is done to determine whether there is impairment in the carrying amount of the Company's fixed assets. Impaiment of asset during the year amounted to Rs.427.92 lakhs and is included in debrciation ( brvious year nil). (26) AS 30: Financial Instruments: Recognition and Measurement a) AS 30 was issued by the Institute of Chartered Accountants of India (ICAI) in 2007 but has not yet been notified by the Government under Section 133 of the Companies Act, 2013. b) The Institute of Chartered Accountants of India has clarified that to the extent of accounting treatments covered by any of the existing notified accounting standards (for eg. AS 11, AS 13 etc,) the existing Accounting Standards would continue to brvail over AS 30. c) Since the company follows the accounting treatment specified in the AS 30 through the accounting treatment under existing Accounting Standards i.e AS 11 & AS 13 etc, AS 30 is not followed. ARUNDATHI KRISHNA Deputy Managing Director ARATHI KRISHNA Joint Managing Director SURESH KRISHNA Chairman & Managing Director S MEENAKSHISUNDARAM Chief Financial Officer R DILIP KUMAR Vice President - Finance & Company Secretary As per our report annexed For SUNDARAM & SRINIVASAN Chartered Accountants Regn. No. 004207S M BALASUBRAMANIYAM Partner Membership No. F7945 Chennai May 20, 2016 |