III. LONG-TERM BORROWINGS Details of securities created (i) Rupee Term Loans: Secured by first and exclusive charge on specific plant and equipment situated at the Company’s factories (ii) Buyer’s credit Secured by exclusive charge on specific plant and equipment situated at the Company’s factories (iii) Soft loan is repayable in 5 yearly in stalments " from the start of commercial sale of the product produced in the commercial plant, or a new producing plant installed on the basis of result of the Technology Development and Demonstration Programme (TDDP) project, whichever is earlier 1 Accounting Standards a) AS - 1 Disclosure of Accounting policies The accounts are maintained on accrual basis as a going concern. b) AS - 2 Valuation of Inventories Inventories are valued in accordance with the method of valuation brscribed by The Institute of Chartered Accountants of India at lower of weighted average cost or net realisable value. c) AS - 3 Cash flow statement Cash flow statement is brpared under "Indirect Method" and the same is annexed. d) AS - 4 Contingencies and events occurring after the balance sheet date Disclosure of contingencies as required by the Accounting Standard is furnished in Note no - 4 (i). f) AS - 6 Debrciation accounting Debrciation has been provided under the straight line method based on the useful life as per the requirements of Schedule II of the Companies Act, 2013. The Company has internally evaluated the useful life of all the assets and that useful life has been considered for providing the debrciation charge. In respect of assets added / sold during the year, pro-rata debrciation has been provided. Assets acquired during the year and whose cost is less than Rs.5,000/- are fully debrciated. The Companies Act, 2013, stipulates systematic allocation of the debrciable amount of an asset over its useful life. The Act also brscribes that a maximum of 5% of the cost can be retained as residual value and the balance 95% to be amortised over the useful life of the asset. However, the Company has chosen to reduce the residual value from the debrciation to be provided for in the terminal year, thereby claiming higher debrciation in the earlier years. g) AS - 7 Construction contracts This accounting standard is not applicable. h) AS - 8 Research and Development This accounting standard is withdrawn. i) AS - 9 Revenue recognition The income of the company is derived from sale of gravity and brssure die-castings and from sale of services. (a) Sale of products is recognised when goods are dispatched through nominated logistics. (b) Income from services are recognised on completion of services and when invoices are raised. (c) Export sales are recognised on the basis of LET export certificates. Interest income is recognised on a time proportion basis taking into account the amount outstanding and rate applicable. Dividend from investments is recognised when the company in which they are held declares the dividend and when the right to receive is established. The revenue and expenditure are accounted on a going concern basis. j) AS - 10 Accounting for fixed assets All the fixed assets are valued at cost including expenditure incurred in bringing them to usable condition as reduced by debrciation. n) AS - 14 Accounting for Amalgamation During the year there was no amalgamation. o) AS - 15 Employee benefits Disclosure is made as per the requirements of the Standard and the same is furnished below: A Defined contribution plans Contribution to provident fund is in the nature of defined contribution plan and are made to a recognised trust. The Company's Provident Fund is exempted under Section 17 of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. Exemption was granted subject to the condition that the employer shall make good deficiency, if any, in the interest rate declared by the Trust vis-à-vis statutory rate. If any such deficiency is determined, the same will be made good by the employer. B Defined benefit plan (a) The Company extends defined benefit plans in the form of leave salary to employees. In addition, the company also extends pension to senior managers of the company. Provision for leave salary and pension is made on actuarial valuation basis. (b) The Company also extends defined benefit plan in the form of gratuity to employees. Contribution to gratuity is made to Life Insurance Corporation of India in accordance with the scheme framed by the Corporation p) AS - 16 Borrowing costs The borrowing cost has been treated in accordance with Accounting Standard on borrowing cost (AS 16) issued by the Institute of Chartered Accountants of India. During the year, a sum of Rs. 0.10 crores (last year Rs. 0.14 crores) being interest on borrowings attributable to qualifying assets have been capitalised under the various heads. q) AS - 17 Segment reporting The Company operates in only one segment viz., Automotive Components and there are no separate reportable segments. r) AS - 18 Related party disclosure Disclosures are made as per the requirements of the standard and clarifications issued by The Institute of Chartered Accountants of India. w) AS - 23 Accounting for Investments in Associates in Consolidated Financial Statements I) The Company holds 23.53% of the equity share capital of Sundram Non-Conventional Energy Systems Limited, Chennai (SNES). Hence, SNES is an associate of the Company. II) Emerald Haven Realty Limited, Chennai (EHRL) (formerly known as Green Earth Homes Limited) is an associate of TVS Motor Company Limited which is a subsidiary of the Company. The Company indirectly holds 28% of the equity share capital of EHRL. Hence, EHRL is an associate of the Company. III) The Company holds 30.53% of the shares of TVS Training & Services Limited, Chennai (TVSTS). Hence, TVSTS is an associate of the Company. x) AS - 24 Discontinuing operations The Company has not discontinued any operation during the year. y) AS - 25 Interim Financial Reporting The Company has elected to publish quarterly financial results which were subject to limited review by the statutory auditors 1 Previous year's figures have been regrouped wherever necessary to conform to the current year's classification. XXII. Accounting standards, additional disclosures and notes on accounts – (continued) VENU SRINIVASAN Dr LAKSHMI VENU As per our report annexed Chairman & Managing Director Joint Managing Director For SUNDARAM & SRINIVASAN Chartered Accountants Firm Regn. No. 004207S M BALASUBRAMANIYAM V N VENKATANATHAN R RAJA PRAKASH Partner Chief Financial Officer Company Secretary Membership No. F7945 Date : 8th May 2015 Place : Chennai |