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Notes to Accounts of Shanthi Gears Ltd.

Mar 31, 2017

The Company’s investment property consists of the property in Coimbatore which has been let out on rent.

As on 31 March 2017 and on 31 March 2016, the fair values of the property is Rs.8.13 Crs and Rs. 8.10 Crs respectively.

The fair value of the investment properties is determined based on the capitalization of net income method, where the market rentals of all the lettable units was considered. The main inputs used are rental growth rates, expected vacancy rates, terminal yields and discount rates based on industry data. The resulting fair value estimates are classified under Level 3 of the Fair value hierarchy.

The Company has no restrictions on the disposal of its investment property and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancement.

NOTES TO FINANCIAL STATEMENTS

The cost of inventories recognized as an expense during the year in respect of continuing operations was Rs.77.46 Crores (for the year ended 31 March 2016: Rs.62.53 Crores).

The cost of inventories recognized as an expense includes Rs.0.85 Crores (during 2015-16: Rs.1.22 Crores) in respect of write downs of inventory to net realizable value.

The inventories of Rs.0.19 Crores (as at 31 March 2016 '' Nil and as at 01 April 2015 Rs. Nil) are expected to be recovered after more than twelve months.

Out of the above Rs. Nil (PY Rs.0.05 Crores) is receivable from Holding Company and Rs.0.05 Crores (PY Rs. Nil) is receivable from TI Tsubamex Private Limited, a related party, disclosed in Note 35.

Trade receivables are non-interest bearing and are generally have credit period to a maximum of 60 days

Transaction in Specified Bank Notes

During the year, the Company had specified bank notes and other denomination note as defined in the MCA notification G.S.R.308(e) dated 31 March 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 08 November 2016 to 30 December 2016, the denomination wise SBNs and other notes as per the notification is given below:

12(iv) The Company has only one class of equity shares having par value of Rs.1/- each . Each holder of Equity shares is entitled to one vote per equity share. Dividends are paid in India Rupees. Dividends proposed by Board of Directors, if any is subject to approval of the Shareholders in the Annual General Meeting, except in case of Interim Dividend.

General Reserve: It represents appropriation of profit by the company.

Securities Premium: Amounts received on issue of shares in excess of the par value has been classified as securities premium.

Retained earnings: Retained earnings comprise of the Company’s prior years’ undistributed earnings after taxes.

In respect of the year ended 31 March 2017, the board of directors propose that a dividend of '' 0.75 per share be paid on fully paid equity shares. This dividend is subject to approval by shareholders at the Annual General Meeting. The total estimated cash outflow would be Rs.7.38 Crores including Dividend Distribution Tax.

Trade payable are non-interest bearing and are normally settled with in a period of 90 days

Based on, and to the extent of information received from the suppliers regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 (MSMED Act), and relied upon by the Auditors, there are no dues to such suppliers.

Sale of goods includes excise duty collected from customers of Rs.19.24 Crores (31 March 2016: Rs.16.89 Crores). Sale of goods net of excise duty is Rs. 176.59 Crores (31 March 2016: Rs.160.42 Crores.)

Sale of scrap includes excise duty collected from customers of Rs.0.38 (31 March 2016: Rs.0.24 Crores.). Sale of goods net of excise duty is Rs.3.19 Crores (31 March 2016: Rs.2.02 Crores.)

Note:

1. Show Cause Notices received from various Government Agencies pending formal demand notices have not been considered as contingent liabilities.

2. The uncertainties and possible reimbursement in respect of the above mentioned contingent liabilities are dependent on the outcome of various legal proceedings and therefore, cannot be predicted accurately.

3. Imported and Indigenous Materials Consumed

A. Consumption of Raw Materials (Refer Note 21)

4. Significant accounting judgments, estimates and assumptions

The preparation of the Company’s Financial Statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgments

In the process of applying the Company’s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the Financial Statements:

Operating lease commitments - Company as lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the fair value of the asset, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Property, Plant and Equipment and Investment Property

The Company has estimated the useful life of Property, Plant and equipment and Investment Property as per the useful life prescribed in Schedule II of the Companies Act, 2013 except in respect of certain categories of assets as described in Note No. 3.16.

Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Defined benefit plans

The cost of the defined benefit gratuity plan and other post-employment leave encashment benefit and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Further details about defined benefit obligations are given in Note 33.

5. Employee Benefits under Defined Benefit Plans

a) Defined Contribution Plan

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll cost to fund the benefit. The Company recognized Rs.1.36 Crores (PY Rs.1.22 Crores) for Provident Fund contribution, Rs.0.10 Crores (PY Rs.0.07 Crores) for Employee State Insurance Scheme in the Statement of Profit & Loss. The contribution payable to these plans by the Company are at the rates specified in the rules of the scheme.

b) Gratuity

Under the Gratuity plan operated by the Company, every employee who has completed at least five years of service gets a Gratuity on departure at 15 days on last drawn salary for each completed year of service as per Gratuity Act, 1972. The scheme is funded with an Insurance Company in the form of qualifying insurance policy. The following table summarizes the components of net benefit expense recognized in the Statement of profit and loss and the funded status and amounts recognized in the Balance Sheet.

Notes:

i. The entire Plan Assets are managed by LIC. In the absence of the relevant information from LIC/Actuary, the above details do not include the composition of plan assets.

ii. The expected return on Plan Assets is as furnished by LIC.

iii. The estimate of future salary increase takes into account inflation, likely increments, promotions and other relevant factors.

iv. The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

These plans typically expose the Company to actuarial risk such as interest rate risk, longevity risk and salary risk.

Interest Rate Risk: A decrease in the bond interest rate will increase the plan liability.

Longevity Risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The Company’s main business is manufacture of Gears & Gear Products. There are no separate reportable segments as per Ind AS 108. The Company has opted to disclose information based on geographical location of customers.

* Represents related Parties with whom the Company had Transactions during the year

Note: Related party relationships are as identified by the Management and relied upon by the Auditors.

6. Operating Leases

The Company has cancellable operating lease agreements for office space. As per the lease terms an amount of Rs.0.38 Crores (PY- Rs.0.25 Crores) is charged to Statement of Profit and Loss account. As lessor, the Company realized an income of Rs.0.35 Crores (PY- Rs.0.35 Crores) on properties under lease.

The following table presents the carrying amounts and fair value of each category of financial assets and liabilities

The management assessed that cash and cash equivalents, trade receivables, current investments, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

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

The Company’s principal financial liabilities comprise of trade payables. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.

A. MARKET RISK

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

i. Foreign currency exchange rate risk

The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

B. CREDIT RISK

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables and loans and advances. None of the financial instruments of the Company result in material concentrations of credit risks.

Exposure to credit risk - The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs.117.91 Crores as at 31 March 2017 and Rs.102.84 Crores as at 31 March 2016, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables and other financial assets.

Customer credit risk is managed by the Company subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored. At 31 March 2017, the Company has 4 customers (31 March 2016: 4 customers, 1 April 2015: 3 customers), the receivables from whom exceeds 5% of total receivables which amounts to approximately 31% (31 March 2015: 31%, 1 April 2014: 29%) of all the total receivables outstanding.

The ageing of trade receivables as of balance sheet date is given below. The age analysis have been considered from the due date. The provision for the not due and less than six months receivables represent expected credit loss.

Credit risk from balances with banks and investment of surplus funds in mutual funds is managed by the Company’s treasury department. The objective is to minimize the concentration of risks and therefore mitigate financial loss.

C. LIQUIDITY RISK

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds, which carry no/low mark to market risks.

7. First Time Adoption of Ind AS

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for year ended on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

1. Since there is no change in the functional currency, the Company has elected to continue with the carrying value as at 1 April 2015 for all of its investment property and property plant & equipment as recognized in its Previous GAAP financial as deemed cost at the transition date.

2. Estimates - The estimates at 1 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from FVTOCI - equity shares and Impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2015 (i.e. the date of transition to Ind-AS) and as of 31 March 2016.

Effect of the Transition to Ind AS:

Reconciliations of the Company’s balance sheets prepared under Indian GAAP and Ind AS as of 1 April 2015 and 31 March 2016 are also presented in Notes 42 & 43. Reconciliations of the Company’s income statement for the year ended 31 March 2016 prepared in accordance with Indian GAAP and Ind AS presented in Note 44.

8. There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.

9. Foot Notes

10. Reclassification:

‘Previous periods’ figures have been re-grouped / re-classified, where necessary to comply with Ind AS accounting.

11. FVTOPL:

Under previous GAAP, the entity accounted for investments in long term funds as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the entity has designated such investments as FVTOPL investments. Ind AS requires FVTOPL investments to be measured at fair value. At the date of transition to Ind AS, difference between the instruments fair value and previous GAAP carrying amount has been recognized in the profit and loss.

12. Trade receivables:

Under previous GAAP the entity has created provision for impairment of receivables if they remained outstanding over the prescribed period. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL). Due to ECL model, the entity impaired its trade receivable by Rs.0.38 Crores on 01 April 2015 which has been eliminated against retained earnings. The impact of Rs.0.43 Crores for the year ended 31 March 2016 has been recognized in the statement of profit and loss.

13. Events after reporting period:

Till the previous year proposed dividend and tax on dividend was accounted in the year pertaining to which dividend had been declared. However, under Ind AS, the liability to pay dividend is recognized only when it is appropriately authorized.

14. Excise duty:

Under previous GAAP sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus, sale of goods and sale of scrap in other operating revenue has increased by Rs.16.89 Crores and Rs.1.78 Crores with a corresponding increase in expense.

15. Defined benefit liabilities:

Under both previous GAAP and Ind AS, the entity recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, re-measurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognized immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI. Thus, the employee benefit cost is reduced by Rs.0.90 Crores and Re-measurement gains/ losses on defined benefit plans has been recognized in the OCI net of tax.

16. Deferred tax:

The various transitional adjustments lead to temporary differences and the entity has accounted for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity. The net impact on deferred tax liabilities was Rs.0.13 Crores on the date of transition and Rs.0.38 Crores for the year ended 31 March 2016.


Mar 31, 2016

Notes:

i. The entire Plan Assets are managed by Life Insurance Corporation of India (LIC). In the absence of the relevant information from LIC/Actuary, the above detail do not include the composition of plan assets.

ii. The expected return on Plan Assets is as furnished by LIC.

iii. The estimate of future salary increase takes into account inflation, likely increments, promotions and other relevant factors.

iv. The details of Experience adjustments to the extent information available are given below.

1. Operating Lease

The Company has cancellable operating lease agreements for office space. As per the lease terms an amount of Rs. 0.25 Crores (PY- Rs. 0.28 Crores) is charged to statement of Profit and Loss account. As lesser the Company realized an income of Rs. 0.40 Crores (PY- Rs. 0.46 Crores) on properties under lease.

2. Previous period figures have been re-grouped wherever necessary to correspond with the current years’ classification / disclosure.


Mar 31, 2015

1 (a) There are no Balances with banks with remaining maturity of more than 12 months from the balance sheet date.

Rs.Crores

2. Commitments and Contingent Liabilities Year ended Year ended 31-03-2015 31-03-2014

A. Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) 1.64 0.85

B. Contingent Liabilities

a) Claims against the Company not acknowledged as debt 0.55 4.21

b) Disputed Demand for Additional Sales Tax on Central Sales Tax pertaining to the year 1998-99. The matter is pending before the Assistant Commissioner, Fast Track Assessment Circle-I, Coimbatore. The value has been paid under protest and writ petition is pending with Madras High Court. 0.01 0.01

c) Disputed Demand for Additional Sales Tax on Central Sales Tax pertaining to the year 1999-2000. The matter is pending before the Assistant Commissioner, Fast Track Assessment Circle-I, Coimbatore. The value has been 0.01 0.01 paid under protest and writ petition is pending with Madras High Court.

d) Disputed Excise Duty on Inter Unit transfer of Machinery - Duty Rs. 0.76 Crores and penalty Rs. 0.76 Crores. The matter is pending before the Appellate Tribunal, South 1.52 1.52 Zonal Bench, Chennai.

Note : Show Cause Notices received from various Government Agencies pending formal demand notices have not been considered as contingent liabilities.

3. Employee Benefits Plans

a) Defined Contribution Plan

The Company makes Provident Fund and Employees State Insurance scheme contributions which are defined contribution plans for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll cost to fund the benefits. The Company recognised Rs.1.18 crores P.Y. Rs.1.01 crores) for Provident Fund contribution and Rs.0.09 crores (P.Y.Rs.0.08 crores) for Employees State Insurance scheme in the Statment of Profit and Loss. The contribution payable to these plans by the Company are at the rates specified in the rules of the schemes.

4. Segment Reporting

The Company's main business is manufacture of Gears & Gear Products. There are no separate reportable segments as per Accounting Standard 17 (AS17). Secondary segmental reporting is based on geographical location of customers and assets.

5. Operating Leases

The Company has operating lease agreements for office space and is cancellable on mutual consent. As per the lease terms an amount of Rs. 0.28 crores (P.Y. Rs.0.18 crores) is charged to statement of Profit and Loss. As lessor the Company realized an income of Rs.0.46 crores (P.Y.Rs. 0.43 crores) on properties under lease.

6. Previous period figures have been re-grouped wherever necessary to correspond with the current years' classification / disclosure.


Mar 31, 2014

1. (i) The Company has only one class of equity shares having par value of Rs. 1/- each. Each holder of Equity shares is entitled to one vote per share.

2.(i) Based on, and to the extent of information received from the suppliers regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 (MSMED Act), and relied upon by the Auditors, there are no dues to such suppliers.

ii) Trade payable includes Rs. 4.86 crores representing cheques issued and not presented for payment.

3.(i) Includes amount due to Holding Company – Nil (PY Rs. 0.66 Crores Net of Tax). 8.(ii) There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

4.(i) There are no provisions that are not contingent and was not provided based on estimation as per Accounting Standard on Provisions, Contingent Liabilities and Contingent Assets (Accounting Standard-29).

5. (a) During the year, the Company has invested an aggregate of Rs. 60.92 crores (Previous Year Rs. 80.31 crores) and redeemed an aggregate of Rs. 48.75 crores (Previous Year Rs. 44.59 crores) of units in various Cash Management Schemes of Mutual Funds, invested for the purpose of deployment of temporary cash surpluses.

6. Segment Reporting

The Company''s main business is manufacture of Gears & Gear Products. There are no separate reportable segments as per Accounting Standard 17 (AS17). Secondary segmental reporting is based on geographical location of customers and assets.

7. The working capital facility with State Bank of India is secured by hypothecation of Inventory, Book Debts, Land & Buildings of A and C Units and certain items of Plant & Machinery. The working capital facility with IDBI Bank is secured by an exclusive charge on certain items of Plant & Machinery.

8. Previous period figures have been re-grouped/re-classified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1. Commitments and Contingent Liabilities

Rs. Crores

31-03-2013 31-03-2012

Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for 2.06 3.02

Contingent Liabilities

Bills Discounted 1.91

Claims against the Company not acknowledged as debt 7.25 7.25

Note:

Show Cause Notices received from various Government Agencies pending formal demand notices have not been considered as contingent liabilities.

2. Segment Reporting

The Company''s main business is manufacture of Gears & Gear Products. There are no separate reportable segments as per Accounting Standard 17 (AS 17).

3. Disclosure in respect of Related Parties pursuant to Accounting Standard 18

a) List of Related Parties

I. Entity with Significant Influence

Tube Investments of India Ltd (between 3rd September, 2012 and 19th November, 2012)

II. Holding Company

Tube Investments of India Ltd (with effect from 19th November, 2012)

III. Fellow Subsidiaries (with effect from 19th November, 2012)

a. Cholamandalam MS General Insurance Company Limited

b. Cholamandalam Investment and Finance Company Limited I. Cholamandalam Distribution Services Limited

ii. Cholamandalam Factoring Limited and

iii. Cholamandalam Securities Limited

(Subsidiaries of Cholamandalam Investment and Finance Company Limited)

c. TI Financial Holdings Limited

d. TICI Motors (Wuxi) Company Limited

e. Financiere C10 SAS I. Sedis SAS

ii. Societe De Commercialisation De Composants Industriels SARL and

iii. Sedis Co. Ltd.

(Subsidiaries of Financiere C10 SAS)

IV. Key Management Personnel (KMP)

Mr. P. Subramanian – Chairman and Managing Director (upto 3rd September, 2012)

Mr. Sreeram Srinivasan - President & Executive Director (with effect from 3rd September, 2012)

4. The working capital facility with State Bank of India is secured by hypothecation of Inventory, Book Debts, Land & Buildings of A and C Units and certain items of Plant & Machinery. The working capital facility with IDBI Bank is secured by an exclusive charge on certain items of Plant & Machinery.

5. Previous period figures have been re-grouped wherever necessary to correspond with the current years'' classification / disclosure.


Mar 31, 2012

1. Contingent Liabilities and Commitments

(i) Contingent Liabilities

(a) Guarantees given by the Company 70,690,553 41,933,395

(b) Letter of Credits 24,808,000 55,818,000

(c) Bills Discounted 19,075,863 16,511,340

(d) Claims against the Company not acknowledged as debts 72,462,947 72,382,697

(ii) Commitments

Estimated amount of contracts remaining to be executed and not provided for on account of Capital Accounts 30,197,136 19,537,832

Show cause notices have not been considered as Contingent Liabilities

2. (a) Working Capital facilities availed from State Bank of India are secured by Hypothecation of Raw Materials, Work-in-Progress, Finished goods, Stock in Trade and on Book Debts of the Company. In addition they are secured by Hypothecation of Land and Buildings of A and C unit and on specific items of Plant & Machinery. The debit balance at the end of the year 31st March 2012 is Rs.96,483 (P.Y.Rs.776,497 Dr)

(b) Against the facilities availed/to be availed from IDBI Bank Ltd., by way of Letter of Credit/ Bank Guarantee / Short term loan, the Company has created exclusive charge on the machines to be imported for Rs.10 Crores

3. Term loans (Foreign Currency Loans) availed from ICICI Bank are secured by Specific items of Plant & Machinery

4. The Company has never defaulted in payment of Loans & Interest

5. The Company has given counter guarantee to the Bank for the guarantees issued for Rs.20,802,035 (P.Y.Rs.13,382,866)

6. Income Tax Assessment is completed upto Assessment Year 2009-10

7. The Company's main business segment is manufacturing Gears and Gear Products. Hence there are no separate reportable segments as per Accounting Standard 17 (AS 17)

8. As per the information available with the Company, there are no dues outstanding including interest as on 31st March, 2012 to Small and Micro Enterprises as defined under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

9. The Revised Schedule VI has become effective from 1st April 2011, for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year 's classification / disclosure.


Mar 31, 2011

1. CONTINGENT LIABILITIES:

Estimated amount of contracts remaining to be executed and not provided for:

a) On Capital Accounts Rs.1.95 Crores. (Previous Year Rs.13.32 Crores)

b) On account of Guarantees issued Rs. 4.19 Crores. (Previous Year Rs.4.72 Crores)

c) On account of Letter of credits established Rs. 5.58 Crores. (Previous Year Rs.9.03 Crores)

d) Claim against the Company not acknowledged as debts Rs. 7.24 Crores. (Previous Year Rs.7.24 Crores)

2. a) The Working Capital facilities and Corporate Loan availed from State Bank of India are secured by hypothecation of Raw Materials, Work-in-Progress, Finished Goods, Stock-in-Trade and on Book Debts of the Company. In addition, they are secured by the Hypothecation of Land and Buildings of A Unit and C Unit and on specific items of Plant & Machinery.

b) Foreign Currency Loans (External Commercial Borrowings) availed from ICICI Bank Limited are secured by specific items of Plant and Machinery.

c) Against the facilities availed / to be availed from IDBI Bank Ltd by way of Letter of Credit / Bank Guarantee / Short Term Loan, the Company has created exclusive charge on the machines to be imported for Rs.10.00 Crores.

4. The Company has given counter guarantee to the Bank for the Guarantees issued for Rs.1.34 Crores. (Previous Year Rs.2.42 Crores)

5. Income Tax assessment is completed upto the Assessment year 2009-10

6. As per the information available with the Company there are no dues outstanding including interest as on 31st March, 2011 to Small and Micro enterprises as defined under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.

7. Auditors Remuneration inclusive of Certification Fees of Rs. 25,250. (Previous Year Rs.19,800)

8. Additional information pursuant to provisions of paragraph 3,4C and 4D of part II of Schedule VI to the Companies Act, 1956.

A. Licensed and Installed Capacity:

Licensed Capacity : Not Applicable

Installed Capacity : Most of the Plant & Machinery being common for different Products manufactured by the Company and installed capacity being dependent on Product mix, which in turn is decided by the actual demand for various Products from time to time, and also on availing of sub-contracting facilities, it is not feasible for the Company to indicate the exact installed capacity.

9. The Companys main business segment is manufacturing Gears and Gear Products. Hence there are no separate reportable segments as per the Accounting Standard 17 (AS 17).

List of Related Parties

1. Key Managerial Personnel

Mr. P. Subramanian, Chairman & Managing Director Ms. S. Sangeetha, Wholetime Director (Upto 30.06.2010)

2. Relatives of Key Managerial Personnel

a) Relatives : Ms. S. Savitha - Daughter of Shri. P. Subramanian and Sister of Ms. S. Sangeetha

Ms. S. Sathya - Daughter of Shri. P. Subramanian and Sister of Ms. S. Sangeetha

b) Enterprises

Savitha Engineering Works (SEW) – Proprietrix – Ms. S. Savitha

10. The Company has not entered into any derivative contracts.

11. Disclosure under Accounting Standard 15 on Employee Benefits:

Disclosures in respect of Defined benefit obligations in respect of gratuity pursuant to Accounting Standard 15 :

12. Figures have been rounded off to the nearest rupee. Previous years figures have been regrouped and reclassified wherever necessary.


Mar 31, 2010

1. CONTINGENT LIABILITIES:

Estimated amount of contracts remaining to be executed and not provided for:

a) On Capital Accounts Rs. 13.32 Crores.

b) On account of Guarantees issued Rs.4.72 Crores.

c) On account of Letter of credits established Rs.9.03 Crores

d) Claim against the Company not acknowledged as debts Rs.7.24 Crores

2. a) The Working Capital facilities and Corporate Loan availed from State Bank of India are secured by hypothecation of Raw Materials, Work-in-Progress, Finished Goods, Stock-in-Trade and on Book Debts of the Company. In addition, they are secured by the Hypothecation of Land and Buildings of SA Unit and XC Unit and on specific items of Plant & Machinery.

b) Foreign Currency Loans (External Commercial Borrowings) availed from ICICI Bank Limited are secured by specific items of Plant and Machinery.

c) Against the facilities availed / to be availed from IDBI Bank Ltd by way of Letter of Credit / Bank Guarantee / Short Term Loan, the Company has created exclusive charge on the machines to be imported for Rs. 10.00 Crores.

3. The Company has given counter guarantee to the Bank for the Guarantees issued for Rs.2.42 Crores.

4. Income Tax assessment is completed upto the Assessment year 2008-09

5. As per the information available with the Company there are no dues outstanding including inter- est as on 31st March, 2010 to Small and Micro enterprises as defined under Micro, Small and Me- dium Enterprises Development (MSMED) Act, 2006.

6. Additional information pursuant to provisions of paragraph 3,4C and 4D of part II of Schedule VI to the Companies Act, 1956,

A. Licensed and Installed Capacity:

Licensed Capacity : Not Applicable

Installed Capacity : Most of the Plant & Machinery being common for different Products manu- factured by the Company and installed capacity being dependent on Prod- uct mix, which in turn is decided by the actual demand for various Products from time to time, and also on availing of sub-contracting facilities, it is not feasible for the Company to indicate the exact installed capacity.

7. The Companys main business segment is manufacturing Gears and Gear Products. Hence there are no separate reportable segments as per the Accounting Standard 17 (AS 17).

List of Related Parties

1. Key Managerial Personnel

Mr. P. Subramanian, Chairman & Managing Director Ms. S. Sangeetha, Wholetime Director

2. Relatives of Key Managerial Personnel

a) Relatives: Ms. S. Savitha - Daughter of Shri. P. Subramanian and Sister of Ms. S. Sangeetha Ms. S. Sathya - Daughter of Shri. P. Subramanian and Sister of Ms. S. Sangeetha

b) Enterprises

Savitha Engineering Works (SEW) - Proprietrix - Ms. S. Savitha

8. The Company has not entered into any derivative contracts.

9. Disclosure under Accounting Standard 15 on Employee Benefits:

Disclosures in respect of Defined benefit obligations in respect of gratuity pursuant to Accounting Standard 15:

10. Figures have been rounded off to the nearest rupee. Previous years figures have been regrouped and reclassified wherever necessary.

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