Home  »  Company  »  Sundaram Finance  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Sundaram Finance Ltd.

Mar 31, 2015

1 Net proceeds from SFL Share Trust

During the year, SFL Shares Trust sold 17,37,012 equity shares of Sundaram Finance Limited. These shares accrued to the Trust on account of the merger of Lakshmi General Finance Limited with Sundaram Finance Limited, in the year 2005, in accordance with a Scheme of Amalgamation approved by the High Court of Madras. Sundaram Finance Limited, being the sole beneficiary of the Trust received an amount of Rs.25655.70 lakhs arising from the sale of above shares and credited the same directly to the Capital Reserve, in line with the underlying substance of the transaction.

2 During the year, the Company entered into an agreement with Royal Sun Alliance Plc UK (RSA) whereby the Company would acquire 26% equity stake of RSA in Royal Sundaram Alliance Insurance Company Ltd (Royal Sundaram) for a consideration of Rs.450 Crores which is awaiting regulatory approvals. The Company currently holds 49.90% in Royal Sundaram and the said acquisition would increase its holding to 75.90%.

3 The Company has spent an amount of Rs.913.95 lakhs towards Corporate Social Responsibility (CSR) under Sec 135 of the Companies Act 2013, in the various areas covered under the regulatory provisions like health care, education, environment and protection of art and culture.

4 RELATED PARTIES DISCLOSURES:

Related party disclosures, as per Accounting Standard 18 - ''Related Party Disclosures'', for the year ended 31st March 2015, are given below:

RELATED PARTIES:

Subsidiary Companies: Associates:

Sundaram BNP Paribas Home Finance Ltd. Axles India Ltd.

Sundaram Asset Management Company Ltd. Turbo Energy Private Ltd.

Sundaram Asset Management Singapore Pte Ltd. Transenergy Ltd.

Sundaram Trustee Company Ltd. Sundaram Dynacast Private Ltd.

Sundaram Business Services Ltd. Sundaram Hydraulics Ltd.

Sundaram BPO India Ltd. Flometallic India Private Ltd.

Sundaram Insurance Broking Services Ltd. The Dunes Oman LLC (FZC)

Sundaram Finance Distribution Ltd.

LGF Services Ltd.

Sundaram BNP Paribas Fund Services Ltd.

Sundaram Infotech Solutions Ltd.

Infreight Logistics Solutions Ltd.

Sundaram Parekh Warehousing Services Ltd.(merged with Infreight Logistics Solutions Ltd. with effect from 01.04.2014)

Joint Ventures:

Royal Sundaram Alliance Insurance Company Ltd.

BNP Paribas Sundaram Global Securities Operations Private Ltd (BNP Paribas Sundaram GSO)

Key Management Personnel:

Mr T T Srinivasaraghavan, Managing Director

Mr Harsha Viji, Director (Strategy & Planning)

Mr A N Raju, Director (Operations)

5 The pending litigations as on 31st March 2015 have been compiled by the company and reviewed by the Statutory Auditors. The current position of the litigation has been evaluated and the effect thereof has been appropriately disclosed in the financial statements.

6 The Company preferred an appeal against the demand raised by the Commissioner of Customs, Tuticorin, in respect of a lease transaction. The Customs Excise and Service Tax Appellate Tribunal (CESTAT) in its Order, remanded the appeal to the Adjudicating Commissioner for requantifying the duty. The Commissioner of Customs, Tuticorin vide Order dated 19.12.2012, re-quantified the duty at Rs.43.79 lakhs. The company filed an appeal against the Order and remitted the duty under protest.

The Hon''ble High Court of Madras granted an interim stay against the collection of penalty of Rs.10 lakhs imposed by CESTAT.

The Special Director of Enforcement, New Delhi, imposed a penalty of Rs.10 lakhs on the Company. The Company has preferred an appeal against the penalty with the Appellate Tribunal for Foreign Exchange and obtained a stay after remitting Rs.2.50 lakhs as directed by the Tribunal. Meanwhile the company has initiated arbitration proceedings against the Lessee and has received an award in its favour.

7 Contingent liabilities in respect of (Rs. in lakhs)

31.03.2015 31.03.2014

a) Liability - To Banks -on Cheques discounted 3,41.05 6,97.09

on Letters of Credit 22,76.74 7,57.91

b) Claims against the company not acknowledged as debts:

Service Tax 75,89.23 64,84.63

Others 14,90.22 15,84.04

8 Estimated amount of contracts remaining to be executed on capital account - v312.65 lakhs (net of advances of Rs.611.87 lakhs) (31.03.2014 - Rs.508.63 lakhs, net of advances of Rs.346.56 lakhs) Investment in Partly paid-up Equity shares Rs.550.00 lakhs (31.03.2014 - Rs.1,098.90 lakhs)

9 Based on the current assessment of the long-term contracts in the ordinary course of business, the Company has made adequate provision for losses where required.

The derivative contracts have been entered into for hedging the foreign currency liability and interest liability. Derivative contracts being in the nature of hedge contracts, the Company does not anticipate any material losses from the same.

10 Exchange Traded Interest Rate (IR) Derivaties : NIL

11 Details of Financial Assets Sold to Securitisation / Reconstruction

Company for Asset Reconstruction: NIL

12 Details of non-performing financial assets purchased / sold during the year 2014-15:

A Details of non-performing financial assets purchased : NIL

B Details of non-performing financial assets sold : NIL

13 Details of financing of parent company products: NIL

14 Details of Single Borrower Limit (SBL) / Group Borrower Limit (GBL) exceeded by the company : NIL

15 Registration obtained from other financial sector regulators: IRDA - Composite Corporate Agency

16 Disclosure of penalties imposed by

Reserve Bank of India and other regulators : NIL

17 Overseas Assets (for those with Joint Ventures and Subsidiaries abroad) NIL

18 Off-balance sheet SPVs sponsored NIL

(which are required to be consolidated as per accounting norms)


Mar 31, 2014

1.1 Segment Reporting

Segment information is presented in the Consolidated Financial Statements in terms of the Accounting Standard 17 - Segment Reporting.

1.2 The Company preferred an appeal against the demand raised by the Commissioner of Customs, Tuticorin, in respect of a lease transaction. The Customs Excise and Service Tax Appellate Tribunal (CESTAT) in its Order, remanded the appeal to the adjudicating Commissioner for Re quantifying the duty. The Commissioner of Customs, Tuticorin vide order dated 19.12.2012, re-quantified the duty at Rs. 43.79 lakhs. The company fled an appeal against the order and remitted the duty under protest.

The Hon''ble High Court of Madras granted an interim stay against the collection of penalty of Rs. 10 lakhs imposed by CESTAT.

The Special Director of Enforcement, New Delhi, imposed a penalty of Rs. 10 lakhs on the Company. The Company has preferred an appeal against the penalty with the Appellate Tribunal for Foreign Exchange and obtained a stay after remitting Rs. 2.50 lakhs as directed by the Tribunal. Meanwhile the company has initiated arbitration proceedings against the Lessee and has received an award in its favour.

2. Estimated amount of contracts remaining to be executed on capital account – Rs. 508.63 lakhs (net of advances of Rs. 346.56 lakhs) (31.03.2013 – Rs. 1949.34 lakhs, net of advances of Rs. 101.54 lakhs)

Investment in Partly paid-up Equity shares Rs. 1098.90 lakhs (31.03.2013 – Nil).

3. There are no amounts due to Small Scale Industries in terms of "The Micro, Small and Medium Enterprises Development Act, 2006".

4. Contingent liabilities in respect of (Rs. in lakhs)

31.03.2014 31.03.2013

a) Liability –

To Banks – on Cheques discounted 6,97.09 16,46.19

on Letters of Credit 7,57.91 3,94.67

b) Claims against the company not acknowledged as debts:

Hire Purchase/Lease transactions – 31.07

Service Tax 64,84.63 61,04.70

Others 16,37.83 14,13.47

5. Previous year''s figures have been regrouped /reclassified wherever necessary to conform to the current year''s presentation.


Mar 31, 2013

1.1 Segment Reporting

Segment information is presented in the Consolidated Financial Statements in terms of the Accounting Standard 17 - Segment Reporting.

1.2 The details of securitised assets outstanding as on 31st March 2013 as per books of the Special Purpose Vehicles (SPV) sponsored by the Company are given below

1.3 In December 2012, the Reserve Bank of India, issued draft guidelines on the regulatory framework for NBFCs, which, inter alia, propose that the asset classification and provisioning norms for NBFCs should, in a phased manner, be made similar to those for banks. In view of the imminent tightening of regulations, the Company has made a provision of Rs. 1,581 lakhs on assets whose instalments are overdue for 120 days and above. Further, given the difficult economic environment, the Company has, as a measure of prudence, made an additional provision of Rs. 2,091 lakhs during the year.

1.4 The Company preferred an appeal against the demand raised by the Commisioner of Customs, Tuticorin, in respect of a lease transaction. The Customs Excise and Service Tax Appellate Tribunal (CESTAT) in its Order, remanded the appeal to the adjudicating Commissioner for requantifying the duty. The Commissioner of Customs, Tuticorin vide its order dated 19.12.2012, re-quantified the duty at Rs. 43.79 lakhs. The Company filed an appeal against the order and remitted the duty under protest.

The Hon''ble High Court of Madras granted an interim stay against the collection of penalty of Rs. 10 lakhs imposed by CESTAT.

The Special Director of Enforcement, New Delhi, imposed a penalty of Rs. 10 lakhs on the Company. The Company has preferred an appeal against the penalty with the Appellate Tribunal for Foreign Exchange and obtained a stay after remitting Rs. 2.50 lakhs as directed by the Tribunal. Meanwhile the Company has initiated arbitration proceedings against the Lessee and has received an award in its favour.

1.5 Estimated amount of contracts remaining to be executed on capital account - Rs. 1,949.34 lakhs (net of advances of Rs. 101.54 lakhs) (31.03.2012 - Rs. 774.63 lakhs, net of advances of Rs. 2,204.47 lakhs)

1.6 There are no amounts due to Small Scale Industries in terms of "The Micro, Small and Medium Enterprises Development Act, 2006".

1.7 Contingent liabilities in respect of (Rs. in lakhs)

31.03.2013 31.03.2012

a) Liability -

To Banks - on Cheques discounted 16,46.19 15,08.96

on Letter of Credit 3,94.67 28,28.95

b) Claims against the Company not acknowledged as Debts:

Hire Purchase / Lease transactions 31.07 31.07

Service Tax 61,04.70 45,01.73

Others 14,13.47 12,54.69

1.8 Previous year''s figures have been regrouped /reclassified wherever necessary to conform to the current year''s presentation.


Mar 31, 2012

A) Paid-up share capital includes 5,09,75,545 Equity Shares allotted as fully paid-up by way of bonus shares by Capitalisation of Reserves and Securities Premium and 37,75,965 Equity Shares allotted for consideration other than cash pursuant to a Scheme of Amalgamation.

b) The number of shares outstanding at the beginning and at the end of the reporting period are the same.

c) No shareholder of the Company holds more than 5% of the Equity Shares.

d) The Company issued 2,77,75,965 Equity Shares by way of bonus shares during the financial year 2008-09.

The Secured Non Convertible Debentures are secured by mortgage of immovable property ranking pari passu with charges created in favour of the trustees in addition to specific assets covered by charge on Hypothecation Loan receivables / Hire purchase / Lease agreements with a security cover of 100% / 125%, as per the terms of issue.

The Term loans from banks are secured by hypothecation of specific assets covered by a charge on Hypothecation Loan Receivables / Hire purchase / Lease agreements.

The Unsecured Subordinated Non Convertible Debentures are subordinated to the existing and future unsecured borrowings of the Company and qualify as Tier II Capital under the Non Banking Financial (Deposit accepting or holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.

Working capital demand loans and cash credit are secured by hypothecation of assets covered by charge on Hypothecation Loan Receivables, Hire Purchase / Lease agreements, ranking pari passu, excluding assets which are specifically charged to others.

Refer Note 4 for Security provided for Term Loans from Banks and Non-Convertible Debentures.

Face value of commercial paper outstanding as on 31.03.2012 was Rs 555,00.00 lakhs (31.03.2011 - Rs 580,00.00 lakhs). Maximum amount of face value of commercial paper outstanding at any time during the year was Rs 1715,00.00 lakhs (2010-11 - Rs 1290,00.00 lakhs)

In accordance with the Reserve Bank of India directives, the Company has created a floating charge on the statutory liquid assets comprising investment in Government Securities of face value Rs 143,62.30 lakhs (Cost - Rs 143,92.77 lakhs) and bank deposits of Rs 66,70.50 lakhs (Refer Note 17 'Cash and Bank balances') in favour of trustees representing the deposit holders of the Company.

During the year the Company has subscribed to the rights equity shares of Sundaram BNP Paribas Fund Services Ltd., Professional Management Consultants Ltd., Transenergy Ltd and Royal Sundaram Alliance Insurance Company Ltd.

During the year the Company has subscribed to the preferential equity share of Sundaram Infotech Solutions Ltd. and Sundaram Hydraulics Ltd.

(a) denotes shares are under a lock in period

(b) denotes investments where provision for diminution in value has been made

(c) denotes increase in holding on receipt of bonus shares @ face value in Omani Riyal

The Long-term loans and advances includes Non-performing Assets of Rs 2,77.00 lakhs (Previous Year - Rs 19,90.53 lakhs)

Advance income tax and tax deducted at source (net of provision) comprises:

Provision for Income Tax Rs 477,86.25 lakhs (31.03.2011 - Rs 381,34.20 lakhs)

Income tax paid under dispute Rs 47,72.76 lakhs(31.03.2011 - Rs 37,51.69 lakhs)

Advance Fringe Benefit Tax Rs 0.16 lakhs (31.03.2011 - Rs 1,70.16 lakhs)

Provision for Fringe Benefit Tax Rs 21.10 lakhs (31.03.2011 - Rs 1,60.87 lakhs)

1 General

1.1 The presentation in the Balance Sheet, Profit and Loss Statement and Notes to the Accounts is in terms of the Revised Schedule VI to the Companies Act, 1956 which has become mandatory with effect from 01st April, 2011. The assets and liabilities have been classified as current and non-current based on a twelve month operating cycle. Previous year's figures have been regrouped / reclassified wherever necessary to conform to the current year's presentation.

1.2 Segment Reporting:

Segment information is presented in the Consolidated Financial Statements in terms of the Accounting Standard - 17 - Segment Reporting.

The credit enhancement and liquidity support were provided in the form of bank deposits for Rs 46,75.00 lakhs. The Company continues to collect and service the receivables in respect of the securitised assets.

During the year, the Company assigned a part of its Hypothecation Loan receivables / Hire purchase assets - 'at par' representing the principal component, aggregating Rs 129999.44 lakhs (Previous Year - Rs 75094.31 lakhs).

1.2 RELATED PARTIES DISCLOSURES:

Related party disclosures, as stipulated by Accounting Standard - 18 - 'Related Party Disclosures', are given below:

RELATED PARTIES:

Subsidiary Companies:

Sundaram Finance Distribution Ltd.

Sundaram BNP Paribas Home Finance Ltd.

Sundaram Asset Management Company Ltd.

Sundaram Trustee Company Ltd.

LGF Services Ltd.

Infreight Logistics Solutions Ltd.

Sundaram Infotech Solutions Ltd.

Sundaram Business Services Ltd.

Professional Management Consultants Ltd.

Sundaram BNP Paribas Fund Services Ltd.

Sundaram Parekh Warehousing Services Ltd.

Sundaram Insurance Broking Services Ltd.

Caltec Servicez Private Limited

Associates:

Axles India Ltd.

Turbo Energy Ltd.

Transenergy Ltd.

Sundaram Dynacast Private Ltd.

Sundaram Hydraulics Ltd.

The Dunes Oman LLC (FZC)

Flometallic India Ltd.

Joint Ventures:

Royal Sundaram Alliance Insurance Company Ltd.

BNP Paribas Sundaram Global Securities Operations Private Ltd (BNP Paribas Sundaram GSO)

Key Management Personnel:

Mr. T. T. Srinivasaraghavan, Managing Director

Mr. Harsha Viji, Director (Strategy & Planning)

1.3 The Commissioner of Customs, Tuticorin raised a demand of Rs 500 lakhs towards penalty on the Company and Rs 1824 lakhs (towards duty) on the Company in September 2006 jointly and severally with the Lessee, in respect of a Lease transaction. The Appellate Tribunal admitted the appeal preferred by the Company and granted stay against the recovery proceedings in March 2007.

During the year, the Customs Excise and Service Tax Appellate Tribunal (CESTAT) in its Order, while mentioning the approximate duty to be around Rs 43 lakhs, remanded the appeal to the adjudicating Commissioner for requantifying the duty. The Tribunal has also revised the penalty to Rs 10 lakhs. The Company has sought legal opinion on the further course of action.

The Special Director of Enforcement, New Delhi, imposed a penalty of Rs 10 lakhs on the Company. The Company has preferred an appeal against the penalty with the Appellate Tribunal for Foreign Exchange and obtained a stay after remitting Rs 2.50 lakhs as directed by the Tribunal. Meanwhile the Company initiated arbitration proceedings against the Lessee and has received an award in its favour.

1.4 Estimated amount of contracts remaining to be executed on capital account - Rs 774.63 lakhs (net of advances of Rs 2204.47 lakhs). (31.03.2011 - Rs 3098.26 lakhs, net of advances of Rs 922.69 lakhs).

1.5 There are no amounts due to Small Scale Industries in terms of "The Micro, Small and Medium Enterprises Development Act, 2006".

1.6 Contingent liabilities in respect of

(Rs in lakhs)

31.03.2012 31.03.2011

a) Liability -

To Banks - on Cheques discounted 15,08.96 16,66.75

on Letter of Credit 28,28.95 11,86.00

b) Claims against the Company not acknowledged as Debts:

Hire Purchase transactions and termination of Lease 31.07 31.07 transactions - Appeals filed by the Company

Service Tax 45,01.73 20,60.01

Others 12,54.69 10,81.69

1.7 Derivative contracts outstanding:

Hedging exchange rate risk 47,10.00 -

Hedging interest rate risk - 545,00.00

1.8 Cost Insurance Freight (CIF) value of imports: Capital goods (on payment basis) 12,98.14 9,57.19

1.9 Expenditure in foreign currency (on payment basis): Interest 9,74.76 -

On other matters 25.43 16.94

1.10 Earnings in foreign currency

Dividend from an Associate Company 2,89.25 -

Income from other services (IT support services) 86.28 68.41


Mar 31, 2011

1. BALANCE SHEET:

1.1 Secured Loans:

a) Non convertible debentures amounting to Rs. 374425.75 lakhs (31.03.2010 – Rs. 317682.03 lakhs), are redeemable at par between 2011 and 2015.

The above debentures are secured by mortgage of two immovable properties ranking pari passu with charges created in favour of the trustees in addition to specific assets covered by Hire Purchase / Lease agreements and a charge on Hypothecation Loan Receivables with a security cover of 100% / 125%, as per the terms of issue.

These Debentures include zero coupon debentures of Rs. 72425.75 lakhs of face value Rs. 80500 lakhs (31.03.2010 – Rs. 34383.03 lakhs, face value Rs. 38100 lakhs).

b) Loans from scheduled banks under "Secured Loans" include

i) Rs. 73984.67 lakhs availed under working capital facilities are secured by hypothecation of assets covered by Hire Purchase / Lease agreements and a charge on Hypothecation Loan Receivables, ranking pari passu, excluding assets which are specifically charged to others.

ii) Rs. 300200.00 lakhs availed as Term Loans are secured by hypothecation of specific assets covered by Hire Purchase / Lease agreements and a charge on Hypothecation Loan Receivables. The charge in respect of Term Loan amounting to Rs. 60000.00 lakhs is pending creation.

2.2 Unsecured Loans:

a) Non convertible debentures amounting to Nil (31.03.2010 – Rs. 33500 lakhs) are partly secured by mortgage of an immovable property, ranking pari passu, with the charges created in favour of the debenture trustees.

b) During the year, the Company issued subordinated non convertible debentures of Rs. 15210 lakhs (2009-10 – Rs. 19500 lakhs) which are redeemable at the end of 10 years.

The debentures are subordinated to the existing and future unsecured borrowings of the Company and qualify as Tier II Capital under the Non Banking Financial (Deposit accepting or holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.

c) Short Term Loans and Advances:

The maximum amount of face value of the commercial paper outstanding at any time during the year was Rs. 129000 lakhs (2009-10 – Rs. 150000 lakhs). The face value of the commercial paper outstanding as of 31.03.2011 was Rs. 58000 lakhs (31.03.2010- Rs. 63500 lakhs)

2.3 Derivative Contracts:

Derivative contracts outstanding as on 31.03.2011, for Interest Rate Swaps is Rs. 54500 lakhs (31.03.2010 – Rs. 12500 lakhs) for hedging interest rate risk.

2.4 Fixed Assets:

a) Buildings on leasehold land include Rs. 1228.16 lakhs (31.03.2010 – Rs. 1228.16 lakhs) being the cost of ownership flats in co-operative societies / associations.

b) Land and Buildings include Rs. 1086.80 lakhs representing undivided share of land (31.03.2010- Rs. 1086.80 lakhs).

c) Plant and Machinery and Vehicles include assets costing Rs. 26713.75 lakhs (gross block) on operating lease contracts (31.03.2010 – Rs. 20047.67 lakhs).

d) Intangible Assets:

In accordance with Accounting Standard – AS 26 – Intangible Assets, software purchased / developed amounting to Rs. 617.47 lakhs (2009-10 – Rs. 447.66 lakhs) is amortised over their expected useful life of three to five years based on a technical evaluation.

2.5 Investments:

In accordance with the Reserve Bank of India directives, the Company has created a floating charge on the statutory liquid assets comprising investment in Government Securities of face value Rs. 13237.30 lakhs (Cost Rs. 13309.75 lakhs) and bank deposits of Rs. 6154.50 lakhs (grouped under Schedule 9, Current Assets – Cash and Bank Balances) in favour of trustees representing the public deposit holders of the Company.

2.6 Current Assets:

a) Cash and Bank balances - with scheduled banks in deposit accounts includes Rs. 12723.60 lakhs (31.03.2010 – Rs. 14595.20 lakhs) provided as collateral for sell down transactions for which a lien has been noted.

2.7 "Secured Loans" from Scheduled Banks and Current Accounts with Scheduled Banks under "Cash and Bank Balances" are stated after deduction / addition of cheques on hand to the extent of Rs. 4828.87 lakhs (31.03.2010 – Rs. 4480.76 lakhs).

2.8 Loans and advances are secured, considered good. Unless otherwise stated.

a) Secured loans include Nil (31.03.2010 – Rs. 18.45 lakhs) due from a Director of the Company. Maximum amount due at any time during the year Rs. 18.45 lakhs (2009-10 – Rs. 19.72 lakhs).

b) Unsecured loans include Rs. 0.12 lakh (31.03.2010 – Rs. 0.18 lakh) due from officer of the Company. Maximum amount due at any time during the year Rs. 0.18 lakh (2009-10 – Rs. 0.24 lakh).

c) Advance income tax and tax deducted at source is net of provision for tax of Rs. 38134.20 lakhs (31.03.2010 - Rs. 35489.44 lakhs) and includes Rs. 3751.69 lakhs (31.03.2010 – Rs. 2050.77 lakhs) towards income tax paid under dispute. Advance Fringe Benefit tax is net of provision for Fringe Benefit tax of Rs. 160.87 lakhs (31.03.2010 – Rs. 298.52 lakhs).

d) Advances and deposits recoverable in cash or kind or for value to be received include Rs. 213.09 lakhs (31.03.2010 – Rs. 213.09 lakhs) towards sales tax paid under dispute in respect of which appeals are pending.

2.9 Current liabilities:

a) Sundry creditors for expenses include Rs. 201.00 lakhs (31.03.2010 - Rs. 182.00 lakhs) payable to directors.

b) Interest accrued but not due includes Rs. 51.15 lakhs on deposits of Directors (31.03.2010 – Rs. 106.64 lakhs).

3. PROFIT AND LOSS ACCOUNT

3.1 Income from operations:

a) Hypothecation Loans / Hire Purchase is net of business origination cost of Rs. 3034.91 lakhs (previous year– Rs. 2641.09 lakhs).

b) During the year, the Company sold a part of its Hire Purchase / Hypothecation Loan receivables ‘at par representing the principal component, aggregating to Rs. 75094.31 lakhs. The excess interest spread (EIS) which the Company is entitled to retain from the interest to be collected from the borrowers, over and above the specified amount of interest to be passed on to the acquirer, will be accounted over the remaining life of the assets sold.

c) Lease income is net of depreciation of Rs. 52.16 lakhs (Previous Year Rs. 98.66 lakhs) and Lease Equalisation Account Rs. 40.53 lakhs (Previous Year – Rs. (91.85) lakhs).

3.3 Income from Services includes Trading of Computer Accessories and Software:

The revenue from sale of computer accessories and software and their individual related costs constitute less than 10% of the total turnover of the Company. Therefore, quantitative information relating to this business has not been stated.

3.5 Financial Expenses:

Interest – Fixed loans includes interest on fixed / cumulative deposits amounting to Rs. 55.12 lakhs paid / credited to Directors (Previous Year - Rs. 75.98 lakhs).

3.6 Employee Benefits:

Defined Contribution Plan:

During the year, the Company has recognised the following amounts in the Profit and Loss account, which are included in Establishment Expenses in Schedule 16:

3.11 Contingent Provision against Standard Assets of Rs. 646.30 lakhs (Previous Year – Rs. 3161.69 lakhs) has been made during the year @ 0.40% of the outstanding Standard Assets. Reserve Bank of India requires a contingent provision @ 0.25% of the outstanding Standard Assets.

3.12 Provisions and Write offs:

Loss on sale of investments comprises Rs. 12.76 lakhs (Previous Year – NIL ) pertaining to current investments and Rs. 396.90 lakhs (Previous Year – NIL) pertaining to long term investments.

3.13 Exchange difference amounting to Rs. 0.27 lakh (net loss) (Previous Year – Rs. 2.88 lakhs-net loss) arising on account of foreign currency transactions has been accounted in the Profit and Loss account in accordance with Accounting Standard – AS 11 – Accounting for the effects of changes in foreign exchange rates.

4. GENERAL

4.1 Segment Reporting: Segment information is presented in the Consolidated Financial Statements in terms of the Accounting Standard – AS 17 – Segment Reporting.

4.2 Related Parties Disclosures: 4.2.1 Related party disclosures, as stipulated by Accounting Standard – AS 18 – Related Party Disclosures, are given below:

Related Parties:

Subsidiary Companies: Associates:

Sundaram Finance Distribution Ltd. Axles India Ltd.

Sundaram BNP Paribas Home Finance Ltd. Turbo Energy Ltd.

Sundaram Asset Management Company Ltd. Transenergy Ltd.

Sundaram Trustee Company Ltd. Sundaram Dynacast Private Ltd.

LGF Services Ltd. Sundaram Mutual Fund

Infreight Logistics Solutions Ltd. Sundaram Medical Foundation

Sundaram Infotech Solutions Ltd. Sundaram Hydraulics Ltd.

Sundaram Business Services Ltd. The Dunes Oman LLC (FZC)

Professional Management Consultants Ltd.

Flometallic India Ltd.

Sundaram BNP Paribas Fund Services Ltd.

Sundaram Parekh Warehousing Services Ltd.

Sundaram Insurance Broking Services Ltd.

Joint Ventures:

Royal Sundaram Alliance Insurance Company Ltd.

Gulf Outsourcing Services Ltd. (till 16.02.2011)

BNP Paribas Sundaram Global Securities Operations Private Ltd. (BNP Paribas Sundaram GSO)

Key Management Personnel:

Mr. T. T. Srinivasaraghavan, Managing Director

Mr. Harsha Viji, Director (Strategy & Planning) - with effect from 24.09.2010

Relatives of Key Management Personnel:

Mr. T. T. Srinivasaraghavan Mr. T. T. Rangaswamy Father

Mrs. Vimala Rangaswamy Mother

Mrs. Bagyam Raghavan Wife

Miss. Anjana Raghavan Daughter

Mr. T. T. Venkatraghavan Son

Mr. T. T. Narendran Brother

Mr. Harsha Viji Mr. S. Viji Father

Mrs. Chitra Viji Mother

Mrs. Sara Vetteth Wife

Miss. Anya Padma Viji Daughter

Master. Arun Mathew Viji Son

Mr. Sriram Viji Brother

4.5 The Commissioner of Customs, Tuticorin raised a demand of Rs. 500 lakhs towards penalty on the Company and Rs. 1824 lakhs (towards duty) on the Company in September 2006 jointly and severally with the Lessee, in respect of a Lease transaction. The Appellate Authority admitted the appeal preferred by the company and granted stay against the recovery proceedings in March 2007.

The Special Director of Enforcement, New Delhi, imposed a penalty of Rs. 10 lakhs on the Company. The Company has preferred an appeal against the penalty with the Appellate Tribunal for Foreign Exchange and obtained a stay after remitting Rs. 2.50 lakhs as directed by the Tribunal. Meanwhile the company initiated arbitration proceedings against the Lessee and has received an award in its favour.

4.6 Estimated amount of contracts remaining to be executed on capital account – Rs. 3098.26 lakhs (net of advance of Rs. 922.69 lakhs). (31.03.2010 - Rs. 2225.15 lakhs - net of advance of Rs. 448.68 lakhs).

4.7 There are no amounts due to Small Scale Industries in terms of "The Micro, Small and Medium Enterprises Development Act, 2006".

4.12 Previous years figures have been regrouped / reclassified wherever necessary to conform to current years classification.


Mar 31, 2010

1. BALANCE SHEET:

1.1 Reserves and Surplus:

A Special Reserve was created in terms of the Rupee Term Loan agreement entered into with International Finance Corporation, Washington. Consequent to the repayment of the term loan, the balance in the Special Reserve has been withdrawn.

1.2 Secured Loans:

a) Non convertible debentures amounting to Rs.317682.03 lakhs (31.03.2009 – Rs.233906.86 lakhs), include zero coupon debentures of Rs.34383.03 lakhs (31.03.2009 – Rs.4306.85 lakhs). The face value of the zero coupon debentures are Rs.38100.00 lakhs (31.03.2009- Rs.4600.00 lakhs). These debentures are redeemable at par between 2010 and 2013.

The above debentures are secured by mortgage of two immovable properties ranking pari passu with the charges created / to be created in favour of the trustees in addition to specific assets covered by Hire Purchase / Lease agreements and a charge on Hypothecation Loan Receivables with a security cover of 100%, as per the terms of issue. The charge in respect of Non convertible debentures amounting to Rs.9500.00 lakhs is pending creation.

1.3 Unsecured Loans:

a) Non convertible debentures amounting to Rs.33500 lakhs (31.03.2009 - Rs.57800 lakhs) are partly secured by mortgage of an immovable property, ranking pari passu, with the charge created / to be created in favour of the debenture trustees. These debentures are redeemable at par during 2010.

b) During the year, the Company raised Rs.19500 lakhs (31.03.2009 – Nil) by the issue of long term unsecured redeemable non convertible subordinated debentures. As on 31st March, 2010 the Company’s outstanding subordinated debentures were Rs.24500 lakhs (31.03.2009 – Rs.5000 lakhs). These debentures are redeemable at par between 2012 and 2017.

The debentures are subordinated to the existing and future unsecured borrowings of the Company and qualify as Tier II Capital under the Non Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.

c) Short Term Loans and Advances:

The maximum amount of face value of the commercial paper outstanding at any time during the year was Rs.150000 lakhs (2008-09 – Rs.118500 lakhs). The face value of the commercial paper outstanding as of 31.03.2010 was Rs.63500.00 lakhs (31.03.2009- Rs.49000.00 lakhs)

1.4 Derivative Contracts:

Derivative contracts outstanding as on 31.03.2010 for Interest Rate Swaps is Rs.12500 lakhs (31.03.2009 – Rs.61800 lakhs) for hedging against floating interest rates.

1.5 Fixed Assets:

a) Buildings on leasehold land include Rs. 1093.97 lakhs (31.03.2009 – Rs.1093.97 lakhs) being the cost of ownership flats in co-operative societies / associations.

b) Land and Buildings include Rs.1086.80 lakhs representing undivided share of land (31.03.2009-Rs.1086.80 lakhs).

c) Plant and Machinery and Vehicles include assets costing Rs. 20047.67 lakhs (gross block) on operating lease contracts (31.03.2009 – Rs.15087.71 lakhs).

d) Intangible Assets:

In accordance with Accounting Standard – AS 26 – Intangible Assets, software purchased / developed amounting to Rs.447.66 lakhs (31.03.2009 – Rs.302.50 lakhs) is amortised based on a technical evaluation.

1.6 Investments:

In accordance with the Reserve Bank of India directives, the Company has created a floating charge on the statutory liquid assets comprising investment in Government Securities of face value Rs.12187.30 lakhs (Cost Rs.12249.70 lakhs) and bank deposits of Rs.5509.70 lakhs (grouped under Schedule 9, Current Assets – Cash and Bank Balances) in favour of trustees representing the public deposit holders of the Company.

1.7 Current Assets:

a) During the year the Company realised Rs.28304.94 lakhs (31.03.2009 – Rs. 69583.50 lakhs) on sell down of receivables. Bank deposits of Rs.3336.00 lakhs have been given as collateral by way of credit enhancement. (31.03.2009 – Rs.10466.60 lakhs).

Cash and Bank balances - with scheduled banks in deposit accounts includes Rs.14595.20 lakhs provided as collateral for sell down transactions for which the lien has been noted.

1.8 “Secured Loans” from Scheduled Banks and Current Accounts with Scheduled Banks under “Cash and Bank Balances” are stated after deduction / addition of cheques on hand to the extent of Rs.4480.76 lakhs (31.03.2009 - Rs.4275.95 lakhs).

1.9 Loans and advances:

a) Secured loans include Rs.18.45 lakhs (31.03.2009 - Rs.19.72 lakhs) due from a Director of the Company. Maximum amount due at any time during the year Rs. 19.72 lakhs (2008-09 - Rs.20.89 lakhs).

b) Unsecured loans include Rs.0.18 lakhs (31.03.2009- Rs.0.39 lakhs) due from officer of the Company. Maximum amount due at any time during the year Rs.0.24 lakhs (2008-09 - Rs.0.84 lakhs).

c) Advance income tax and tax deducted at source is net of provision for tax of Rs.35489.44 lakhs (31.03.2009 - Rs. 31194.31 lakhs) and includes Rs.2050.77 lakhs (31.03.2009 -Rs.2898.72 lakhs) towards income tax paid under dispute.

Advance Fringe Benefit tax is net of provision for Fringe Benefit tax of Rs.298.52 lakhs (31.03.2009-Rs.404.76 lakhs)

d) Advances and deposits recoverable in cash or kind or for value to be received include Rs. 213.09 lakhs (31.03.2009 - Rs. 186.09 lakhs) towards sales tax paid under dispute in respect of which appeals are pending.

1.10 Current liabilities:

a) Sundry creditors for expenses include Rs.182.00 lakhs (31.03.2009 - Rs. 125.50 lakhs) payable to directors.

b) Interest accrued but not due includes Rs.106.64 lakhs on deposits of Directors (31.03.2009 – Rs.43.63 lakhs).

2. PROFIT AND LOSS ACCOUNT

2.1 Income from operations:

a) Hypothecation Loans / Hire Purchase is net of business origination cost of Rs.2641.09 lakhs (Previous Year – Rs.2047.86 lakhs).

b) Lease is net of depreciation of Rs.98.66 lakhs (Previous Year Rs.160.10 lakhs) and Lease Equalisation Account Rs.(91.85) lakhs (Previous Year – Rs.55.77 lakhs).

2.2 Profit on sale of shares:

Profit on sale of shares is on the sale of 11,60,066 equity shares of face value of Rs.5 each – WABCO - TVS (India) Ltd. pursuant to an agreement.

2.3 Financial Expenses:

Interest – Fixed loans includes interest on fixed/cumulative deposits amounting to Rs.75.98 lakhs (Previous Year - Rs.54.76 lakhs) paid / credited to Directors.

2.4 A general provision of Rs.3161.69 lakhs (Previous Year – NIL) has been made during the year @ 0.40% of the standard assets.

2.5 Provisions and Write offs:

Loss on sale of investments comprises Rs.NIL lakhs (Previous Year – Rs.2.15 lakhs) pertaining to current investments.

2.6 Exchange difference amounting to Rs.2.88 lakhs (net loss) (Previous Year - Rs.4.24 lakhs-net gain) arising on account of foreign currency transactions has been accounted in the Profit and Loss account in Accordance with Accounting Standard – AS 11 – Accounting for the effects of changes in foreign exchange rates.

3. GENERAL

3.1 Segment Reporting

Segment information is presented in the Consolidated Financial Statements in terms of the Accounting Standard – AS 17 – Segment Reporting.

3.2 Related Parties Disclosures:

3.2.1 Related party disclosures, as stipulated by Accounting Standard – AS 18 – Related Party Disclosures, are given below:

Related Parties:

Subsidiary Companies: Associates:

Sundaram Finance Distribution Ltd. Axles India Ltd.

Sundaram BNP Paribas Home Finance Ltd. Turbo Energy Ltd.

Sundaram BNP Paribas Asset Management Co. Ltd. Transenergy Ltd.

Sundaram BNP Paribas Trustee Co. Ltd. Sundaram Dynacast Pvt. Ltd.

LGF Services Ltd. Sundaram BNP Paribas Mutual Fund

Infreight Logistics Solutions Ltd. Sundaram Medical Foundation

Sundaram Infotech Solutions Ltd. Sundaram Hydraulics Ltd.

Sundaram Business Services Ltd. The Dunes Oman LLC (FZC)

Professional Management Consultants Ltd.

Sundaram BNP Paribas Fund Services Ltd.

Key Management Personnel: Joint Venture:

Mr. T. T. Srinivasaraghavan, Managing Director Royal Sundaram Alliance Insurance Co. Ltd.

Mr. Srinivas Acharya, Deputy Managing Director Gulf Outsourcing Services Ltd.

BNP Paribas Sundaram Global Securities Operations Pvt. Ltd.

Relatives of Key Management Personnel:

Mr. T. T. Srinivasaraghavan Mr. T. T. Rangaswamy Father

Mrs. Vimala Rangaswamy Mother

Mrs. Bagyam Raghavan Wife

Miss. Anjana Raghavan Daughter

Master T. T. Venkatraghavan Son

Mr. T. T. Narendran Brother

Mr. Srinivas Acharya Mrs. Revathi Srinivas Wife

Mr. Vishal Srinivas Son

Mrs. Radha Venkatesh Sister

4.0 The Writ Petition challenging the levy of Service Tax on Hire Purchase and Leasing w.e.f. 16.07.2001 filed before Madras High Court by the Trade Associations had been dismissed. S.L.P against the High Court Order filed by the Trade Associations has been admitted and notice ordered without stay. Till date no service tax has been remitted.

4.1 The Commissioner of Customs, Tuticorin raised a demand of Rs. 500 lakhs towards penalty on the Company and Rs. 1824 lakhs (towards duty) on the Company jointly and severally with the Lessee, in respect of a Lease transaction. The Appellate Authority admitted the appeal preferred by the Company and granted stay against the recovery proceedings.

The Special Director of Enforcement, New Delhi, imposed a penalty of Rs. 10 lakhs on the Company. The Company has preferred an appeal against the penalty with the Appellate Tribunal for Foreign Exchange and obtained a stay after remitting Rs. 2.50 lakhs as directed by the Tribunal. Meanwhile the Company initiated arbitration proceedings against the Lessee and has received an award in its favour.

4.2 Securities and Exchange Board of India has alleged violation of Regulation 13(6) of SEBI (Prohibition of Insider Trading) Regulations, 1992 and imposed a penalty of Rs.10 lakhs on the Company vide its Order dated 31st March 2010. The Company has preferred an appeal against the said Order before Securities Appellate Tribunal which has since been admitted.

4.3 Estimated amount of contracts remaining to be executed on capital account – Rs.2225.15 lakhs (net of advance of Rs.448.68 lakhs). (31.03.2009 – Rs.1028.07 lakhs - net of advance of Rs.312.48 lakhs).

4.4 There are no amounts due to Small Scale Industries in terms of “The Micro, Small and Medium Enterprises Development Act, 2006”.

4.5 Previous Year’s figures have been regrouped / reclassified wherever necessary to conform to current year’s classification.

Find IFSC