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Accounting Policies of Sundram Fasteners Ltd. Company

Mar 31, 2016

(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 prescribed 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.

(5) AS 5: Net profit or loss for the period, prior period items and changes in accounting policies (i) Net profit for the period:

All items of income and expense in the period are included in the determination of net profit for the period, unless specifically mentioned elsewhere in the financial statements or is required by an Accounting Standard. Following are the details of income and expenses in the period which are exceptional:

(iii) Changes in accounting policies

There is no change in the accounting policies of the Company from that of the previous year.

6) AS 6: Depreciation Accounting

The standard is withdrawn with effect from March 30, 2016 and included in AS 10 "Property, Plant and Equipment".

(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This Standard was withdrawn with effect from 1-4-2003 consequent to Accounting Standard AS 26 on Accounting for Intangible Assets becoming mandatory.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

Depreciation 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 prescribed 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 depreciation 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 prevailing on close of the accounting year.

Export sales are accounted at rates prevailing 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 previous year).

(12) AS 12: Accounting for Government grants

The Company has not received any grant from the Government during the year.

(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 previous year Rs, 987.15 lakhs.

ii) Employer''s Contribution to Superannuation Fund during the year Rs, 69.32 lakhs previous 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:

The principal plan assets consists of a scheme of insurance taken by the Trust, which is a qualifying policy. Break down of individual investments that comprise the total plan assets is not supplied by the insurer.

(iii) Leave Salary - Compensated Absences

The Company also extends defined benefit plans in the form of Compensated absences to employees. Provision for Compensated absences is made on actuarial valuation basis.

The Employee Benefits towards Compensated absences are provided based on actuarial valuation made at the end of the year.

(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 18: Related party disclosures Related Parties :

(I) Where Control exists:

(A) Subsidiary Companies Domestic Subsidiaries

1. Sundram Fasteners Investments Ltd., Chennai

2. TVS Upasana Ltd., Chennai (Formerly Upasana Engineering Ltd)

3. Sundram Non - Conventional Energy Systems Limited, Chennai

4. Sundram Precision Components Ltd., Chennai (Formerly Sundram Bleistahl Limited)

5. TVS Infotech Ltd., Chennai

Foreign Subsidiaries

1. Sundram International Ltd., New Castle, United Kingdom

2. TVS Infotech Inc., Michigan, USA (Subsidiary of TVS Infotech ltd, Chennai )

3. Sundram International Inc., Michigan, USA

4. Cramlington Precision Forge Ltd., Northumberland, United Kingdom (Subsidiary of Sundram International Ltd, New Castle, United Kingdom )

5. Sundram Fasteners (Zhejiang) Ltd., Zhejiang, Peoples Republic of China (Subsidiary of Sundram International Ltd, New Castle, United Kingdom)

6. Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany (Transferred effective 30th March, 2016)

7. PUT Grundstrucks GmbH, Peine, Federal Republic of Germany (Transferred effective 30th March, 2016)

8. TVS Peiner Services, GmbH (Formerly Peiner Logistick GmbH), Peine, Federal Republic of Germany (Transferred effective 30th March, 2016)

(B) Associate

1. TV Sundram Iyengar & Sons Private Ltd., Madurai and

2. Southern Roadways Ltd., Madurai

(C) Joint Venture

Windbolt GmbH, Germany

(ceased to be a joint venture in financial year 2014-15, RBI approval filing completed during

financial year 2015-16)

(II) Other Related Parties with whom transactions have been entered into during the year: (A) Key Management Personnel

Mr Suresh Krishna,

Ms Arathi Krishna,

Ms Arundathi Krishna,

Mr V.G.Jaganathan*#

Mr S Meenakshisundaram*@

Mr R Dilip Kumar*@

* Key Management Personnel as per Companies Act, 2013

# retired with effect from April 01, 2016 @ with effect from April 04, 2016

(B) Relatives of Key Management Personnel

Ms Usha Krishna and Ms Preethi Krishna

(C) Enterprise in which Key Management Personnel have significant influence Upasana Finance Limited, Chennai

(b) During the year Rs.450.71 lakhs(Rs.453.10 lakhs) of Lease payments recognised in the statement of profit and loss, in respect of operating lease agreements entered into on or after 01.04.2001 as well as share of lease rent for aircraft under joint ownership.

(c) Significant Leasing arrangements:

The company has entered into leasing arrangements in respect of vehicles.

(i) Basis of determining contingent rent:

Contingent rents are payable for excessive, improper or unauthorised use of the asset, beyond the terms of the lease agreement, prejudicially affecting the resale value of the asset, either by way of increase in lease rentals or by way of lump-sum amount, as agreed between the parties.

(ii) Renewal / purchase options and escalation clauses:

Lease agreements are renewable for further period or periods on terms and conditions mutually agreed between the parties. Variations in lease rentals are made in the event of a change in the basis of computation of lease rentals by the lessor.

(iii) There are no restrictions imposed by the lease arrangements, concerning dividends, additional debt & further leasing.

(21) 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.

(22) 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.

(23) AS 23: Accounting for Investments in associates in Consolidated Financial Statements Company has no associates as defined in AS 23.

(24) AS 24: Discontinuing Operations

The Company has not discontinued any operations during the year.

(25) 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.

(30) 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 prevail 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.


Mar 31, 2015

(1) AS 1: Disclosure of accounting policies

The accounts are maintained on accrual basis as a going concern.

(2) AS 2: Valuation of inventories

Inventories are valued at lower of cost or net realisable value. Cost is ascertained on weighted average basis in accordance with the method of valuation prescribed 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 statements

Cash Flow Statement is attached to the Balance Sheet and Statement of Profit and Loss.

(4) AS 4: Contingencies and Events occurring after the Balance Sheet date

There are no signicant events occuring after the Balance Sheet date that materially affect the financial statements for the current year.

(5) AS 5: Net profit or loss for the period, prior period items and changes in accounting policies (i) Net profit for the period

All items of income and expense in the period are included in the determination of net profit for the period, unless specifically mentioned elsewhere in the financial statements or is required by an Accounting Standard. Following are the details of income and expenses in the period which are not in the normal course of the business.

(6) AS 6: Depreciation Accounting

Depreciation has been provided in the accounts for the financial year 2014-15 as per the useful life prescribed under Schedule II of the Companies Act, 2013, except in respect of certain category of plant and equipments, where useful life is different than those prescribed under schedule II. In respect of these assets, the useful life has been determined based on technical assessments.

The carrying value of fixed assets whose lives have expired as at 1st April 2014 have been charged in Retained earnings amounting to Rs. 1,027.74 lakhs (net of deferred tax Rs. 529.20 lakhs).

Cost of Leasehold lands are amortised over the period of lease.

(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: Accounting for fixed assets

The gross blocks of fixed assets are disclosed at the cost of acquisition, which includes taxes, duties (net of excise duty credit availed) and other identifiable direct expenses incurred up to 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 prevailing on close of the accounting year.

Export sales are accounted at rates prevailing 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. 5,887.47 lakhs (Rs. 268.95 lakhs gain in the previous 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 Act, in respect of shares held in subsidiary companies through the nominees.

(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. 987.15 lakhs previous year Rs. 918.53 lakhs.

ii) Employer's Contribution to Superannuation Fund during the year Rs. 71.88 lakhs previous year Rs. 75.96 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.

(iii) Leave Salary - Compensated Absences

The Company also extends defined benefit plans in the form of Compensated absences to employees. Provision for Compensated absences is made on actuarial valuation basis.

The Employee Benefits towards Compensated absences are provided based on actuarial valuation made at the end of the year.

(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 which are subject to similar risks and returns.

(18) AS 18: Related party disclosures Related Parties :

(I) Where Control exists: (A) Subsidiary Companies Domestic Subsidiaries

1. Sundram Fasteners Investments Ltd., Chennai,

2. Upasana Engineering Ltd., Chennai,

3. Sundram Non-Conventional Energy Systems Ltd., Chennai,

4. Sundram Bleistahl Ltd, Chennai.

5. TVS Infotech Ltd., Chennai (from 18.06.2014)

Foreign Subsidiaries

1. Cramlington Precision Forge Ltd., Northumberland, United Kingdom,

2. Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia,

3. Sundram Fasteners (Zhejiang) Ltd., Zhejiang, Peoples Republic of China,

4. Sundram International Inc, Michigan, USA,

5. TVS Peiner Services, GmbH (formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany,

6. Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany and

7. PUT Grundstücks GmbH, Peine, Federal Republic of Germany.

8. TVS Infotech Inc., Michigan, USA (Subsidiary of TVS Infotech Ltd.) (from 18.06.2014)

(B) Associate

1. TV Sundram Iyengar & Sons Private Ltd., Madurai and

2. Southern Roadways Ltd., Madurai

(C) Joint Venture

Windbolt GmbH, Germany

(II) Other Related Parties with whom transactions have been entered into during the year :

(A) Key Management Personnel

Mr Suresh Krishna, Ms Arathi Krishna, Ms Arundathi Krishna and Mr. V.G.Jaganathan*

(B) Relatives of Key Management Personnel

Ms Usha Krishna and Ms Preethi Krishna

(C) Enterprise in which Key Management Personnel have significant influence

Upasana Finance Limited, Chennai

* Key Management Personnel as per Companies Act, 2013.

(19) AS 19: Accounting for Leases

The company has entered into lease agreements for a period up to five years, which are in the nature of operating leases as defined in the Accounting Standard prescribed by the Institute of Chartered Accountants of India.

(b) During the year Rs. 453.10 lakhs(Rs. 448.45 lakhs) of Lease payments recognised in the statement of profit and loss, in respect of operating lease agreements entered into on or after 01.04.2001 as well as share of lease rent for aircraft under joint ownership.

(c) Significant Leasing arrangements :

The Company has entered into leasing arrangements in respect of vehicles.

(i) Basis of determining contingent rent :

Contingent rents are payable for excessive, improper or unauthorised use of the asset, beyond the terms of the lease agreement, prejudicially affecting the resale value of the asset, either by way of increase in lease rentals or by way of lump-sum amount, as agreed between the parties.

(ii) Renewal / purchase options and escalation clauses :

Lease agreements are renewable for further period or periods on terms and conditions mutually agreed between the parties. Variations in lease rentals are made in the event of a change in the basis of computation of lease rentals by the lessor.

(iii) There are no restrictions imposed by the lease arrangements, concerning dividends, additional debt and further leasing.

(21) AS 21: Consolidated financial statements

Consolidated financial statements of the Company and its subsidiaries, viz.

Domestic Subsidiaries

a) Upasana Engineering Limited, Chennai

b) Sundram Bleistahl Limited, Chennai

c) Sundram Non-Conventional Energy Systems Limited, Chennai

d) Sundram Fasteners Investments Ltd., Chennai

e) TVS Infotech Limited, Chennai

Foreign Subsidiares

a) Sundram Fasteners (Zhejiang) Limited, Zhejiang, People's Republic of China

b) Cramlington Precision Forge Limited, Northumberland, UK

c) Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia (formerly RBI Autoparts Sdn Bhd, Malaysia)*

d) Sundram International Inc, Michigan, USA

e) Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany

f) PUT Grundstucks GmbH, Peine, Federal Republic of Germany

g) TVS Peiner Services GmbH (Formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany h) TVS Infotech Inc, Michigan, USA are annexed.

* Sundram RBI Sdn. Bhd (SRBI) has not been in operation during the year. Further, the shares of SRBI have been divested after the year end. Hence consolidation has not been done for the year 2014- 15.

(22) 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.

(23) AS 23: Accounting for Investments in associates in Consolidated Financial Statements Company has no associates as defined in AS 23.

(24) AS 24: Discontinuing Operations

The Company has not discontinued any operations during the year.

(25) 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.

(26) 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.

The Company had entered into a Technical agreement for manufacture of tappets. The Technical Know- how fees paid for acquiring Technical Know-how has been grouped under Technical Know-how fees.

(27) AS 27: Financial Reporting of Interests in Joint Ventures

A) The Company has entered into joint venture agreements with T V Sundram Iyengar and Sons Private Limited, Madurai and The Ramco Cements Limited, Chennai (Formerly known as Madras Cements Limited, Chennai) for utilisation of Aircraft for business purposes. The agreement involves joint control and ownership of the aircraft by the venturers.

During the year the company sold the share in the Joint venture and the Company's share of expenditure and loss on sale of share have been recognised in the books of accounts as detailed below :

(B) Winbolt GmbH

The Company has participated in capital contribution of 24.99% in Windbolt GmbH alongwith Mr.Wolfgang Walter Naumann. The scheme of capital contribution is accounted at cost (vide Note No. 9).

(28) 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. In this, it was found that there was no impaiment of any asset (previous year impairment loss Rs. 23.68 Lakhs).


Mar 31, 2014

I. 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

Inventories are valued at lower of cost or net realisable value. Cost is ascertained on weighted average basis in accordance with the method of valuation prescribed 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 statements

Pursuant to the listing agreement with Stock Exchanges, Cash Flow Statement is attached to the Balance Sheet and Statement of Profit and Loss.

(4) AS 4: Contingencies and Events occurring after the Balance Sheet date

There are no signicant events occuring after the Balance Sheet date that materially affect the financial statements for the current year.

(5) AS 5: Net profit or loss for the period, prior period items and changes in accounting policies

(i) Net profit for the period

All items of income and expense in the period are included in the determination of net profit for the period, unless specifically mentioned elsewhere in the financial statements or is required by an Accounting Standard. Following are the details of income and expenses in the period which are not in the normal course of the business.

(6) AS 6: Depreciation Accounting

Depreciation is provided under Straight Line Method as per the Schedule XIV of the Companies Act, 1956, after identifying the units constituting continuous process plants for applying appropriate rates of depreciation. The specified period for assets as on April 1, 1993, has been calculated by allocating unamortised value as on that date as per the books over the recomputed specified period.

With respect to the assets of Autolec Division, Chennai acquired by the Company under the Scheme of Amalgamation, depreciation has been charged under Straight Line/ Written Down Value Method as follows:

a) For Assets acquired before 31st March 1991, depreciation has been charged at Written down value Method as per Schedule XIV rates prevailing during that period.

b) For assets acquired after 1st April 1991 but before 31st March 1993 depreciation has been charged at Straight Line Method as per Schedule XIV rates prevailing during that period.

c) With regard to additions to assets after 1st April 1993, depreciation is charged on Straight Line Method at the new rates prescribed.

Cost of Leasehold lands are amortised over the period of lease.

Technical know-how fees is amortised over the agreement period.

(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.

Direct Export sales are recognised on the basis of date of bills of lading and let export certification. Export benefits are recognised on post shipment basis.

The revenue and expenditure are accounted on a going concern basis.

Interest incomes/expenses are recognised using the time proportion method based on the rates implicit in the transaction.

Dividend income is recognised when the right to receive dividend is established.

(10) AS 10: Accounting for fixed assets

The gross blocks of fixed assets are disclosed at the cost of acquisition, which includes taxes, duties (net of excise duty credit availed) and other identifiable direct expenses incurred up to 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 prevailing on close of the accounting year.

Export sales are accounted at rates prevailing 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 - gain of Rs 268.95 lakhs (Rs 2,589.04 lakhs loss in the previous year).

(12) AS 12: Accounting for Government grants

Lump sum capital subsidies, not relating to any specific fixed asset, received from state governments for setting up new projects are accounted as capital reserve.

During the year, the Company has received Rs 30 lakhs from state government of Uttarakhand as special capital subsidy, for setting up an industrial undertaking in the state. The capital subsidy received has been credited to capital reserve.

(13) AS 13: Accounting for Investments

(a) Investments are accounted at the cost of acquisition which includes stamp fees, etc. All the investments are long term investments. 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 49 of the Act, in respect of shares held in subsidiary companies through the nominees.

(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 918.53 lakhs previous year Rs 887.74 lakhs

ii) Employer''s Contribution to Superannuation Fund during the year Rs 75.96 lakhs previous year Rs 76.63 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. The net liability due to interest shortfall determined under paragraphs 58 & 59 of AS-15 (Revised) amounting to NIL (Rs 19.08 lakhs) has been provided for.

(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.

The principal plan assets consists of a scheme of insurance taken by the Trust, which is a qualifying policy. Break down of individual investments that comprise the total plan assets is not supplied by the insurer.

(iii) Leave Salary - Compensated Absences

The Company also extends defined benefit plans in the form of Compensated absences to employees. Provision for Compensated absences is made on actuarial valuation basis.

The Employee Benefits towards Compensated absences are provided based on actuarial valuation made at the end of the year.

Employee benefits towards Compensated absences recognised in the Statement of Profit and Loss are as follows:

The estimates of future salary increases, considered in actuarial valuation taking into account of inflation, seniority, promotion, attrition and relevant factors, such as supply and demand in the employment market.

(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 same segment which are subject to similar risks and returns.

(18) AS 18: Related party disclosures Related Parties :

(I) Where Control exists:

(A) Subsidiary Companies Domestic Subsidiaries

1. Sundram Fasteners Investments Ltd., Chennai,

2. Upasana Engineering Ltd., Chennai,

3. Sundram Non-Conventional Energy Systems Ltd., Chennai,

4. Sundram Bleistahl Ltd, Chennai.

Foreign Subsidiaries

1. Cramlington Precision Forge Ltd., Northumberland, United Kingdom,

2. Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia,

3. Sundram Fasteners (Zhejiang) Ltd., Zhejiang Peoples Republic of China,

4. Sundram International Inc, Michigan, USA,

5. TVS Peiner Services, GmbH (formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany,

6. Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany and

7. PUT Grundstücks GmbH, Peine, Federal Republic of Germany.

(B) Associate

1. TVS Infotech Ltd., Chennai,

2. TVS Infotech Inc, Michigan, USA (Subsidiary of associate),

3. TV Sundram Iyengar & Sons Ltd., Madurai and

4. Southern Roadways Ltd., Madurai

(C) Joint Venture

Windbolt GmbH, Germany

(II) Other Related Parties with whom transactions have been entered into during the year :

(A) Key Management Personnel

Mr Suresh Krishna, Ms Arathi Krishna and Ms Arundathi Krishna

(B) Relatives of Key Management Personnel

Ms Usha Krishna and Ms Preethi Krishna

(C) Enterprise in which Key Management Personnel have significant influence

Upasana Finance Limited, Chennai

(19) AS 19: Accounting for Leases

The company has entered into lease agreements for a period up to five years, which are in the nature of operating leases as defined in the Accounting Standard prescribed by the Institute of Chartered Accountants of India.

(a) Future minimum lease payments under non cancellable operating leases in respect of lease agreements entered into on or after 01.04.2001:

(b) During the year Rs 448.45 lakhs(Rs 429.06 lakhs) of Lease payments recognised in the statement of profit and loss, in respect of operating lease agreements entered into on or after 01.04.2001 as well as share of lease rent for aircraft under joint ownership.

(c) Significant Leasing arrangements :

The Company has entered into leasing arrangements in respect of vehicles and data processing equipments.

(i) Basis of determining contingent rent :

Contingent rents are payable for excessive, improper or unauthorised use of the asset, beyond the terms of the lease agreement, prejudicially affecting the resale value of the asset, either by way of increase in lease rentals or by way of lump-sum amount, as agreed between the parties.

(ii) Renewal / purchase options and escalation clauses :

Lease agreements are renewable for further period or periods on terms and conditions mutually agreed between the parties. Variations in lease rentals are made in the event of a change in the basis of computation of lease rentals by the lessor.

(iii) There are no restrictions imposed by the lease arrangements, concerning dividends, additional debt and further leasing.

(20) AS 20: Earnings per share

Basic earnings per share are disclosed in the Statement of Profit and Loss. There is no diluted earnings per share as there are no dilutive potential equity shares.

(21) AS 21: Consolidated financial statements

Consolidated financial statements of the Company and its subsidiaries, viz.

Domestic Subsidiaries

1. Sundram Fasteners Investments Ltd., Chennai, 2. Upasana Engineering Ltd., Chennai, 3. Sundram Non- Conventional Energy Systems Ltd., Chennai, 4. Sundram Bleistahl Ltd, Chennai.

Foreign Subsidiaries

1. Cramlington Precision Forge Ltd., Northumberland, United Kingdom, 2. Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia, 3. Sundram Fasteners (Zhejiang) Ltd., Zhejiang Peoples Republic of China, 4. Sundram International Inc, Michigan, USA, 5. TVS Peiner Services, GmbH (formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany, 6. Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany, 7. PUT Grundstücks GmbH, Peine, Federal Republic of Germany are annexed.

(22) 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.

(23) AS 23: Accounting for Investments in associates in Consolidated Financial Statements

TVS Infotech Limited, Chennai and TVS Infotech Inc, Michigan, USA (formerly TVS International Inc) are associates of the Company and have been considered in the preparation of the Consolidated Financial Statements of the Company.

(24) AS 24: Discontinuing Operations The Company has not discontinued any operations during the year.

(25) 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.

(26) 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.

The company had entered into a Technical agreement for manufacture of tappets, the Technical Know how fees paid for acquiring Technical Know how has been grouped under Technical Know how fees.

(27) AS 27: Financial Reporting of Interests in Joint Ventures

A) The Company has entered into joint venture agreements with T V Sundram Iyengar and Sons Limited, Madurai and The Ramco Cements Limited, Chennai (formerly known as Madras Cements Limited, Chennai) for utilisation of Aircraft for business purposes. The agreement involves joint control and ownership of the aircraft by the ventures. The Company''s share of jointly controlled asset and expenditure have been recognised in the books of accounts as detailed below :

B) The Company has participated in capital contribution of 24.99% in Windbolt GmbH along with Mr. Wolfgang Walter Naumann. The scheme of capital contribution is accounted at cost (Vide Note No.9).

(28) AS 28: Impairment of Assets

At the Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the Company''s fixed assets. If any such indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. After recognition of impairment loss, the depreciation charge for the asset is adjusted in future periods to allocate the asset''s revised carrying amount, less its residual value if any, on straight line basis over its remaining useful life.

During the year Rs. 23.68 Lakhs (Nil for the previous year) accounted for impairment loss.


Mar 31, 2013

(1) AS 1: Disclosure of accounting policies

The accounts are maintained on accrual basis as a going concern.

(2) AS 2: Valuation of inventories

Inventories are valued at lower of cost or net realisable value. Cost is ascertained on weighted average basis in accordance with the method of valuation prescribed 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 statements

Pursuant to the listing agreement with Stock Exchanges, Cash Flow Statement is attached to the Balance Sheet and Statement of Profit and Loss.

(4) AS-4: Contingencies and Events occurring after the balance sheet date

The interim dividend declared and paid in April 2013 by the subsidiary viz., Sundram Non-Conventional Energy Systems Limited, Chennai amounting to Rs 26.47 lakhs for the year ended 31st March, 2013 will be recognised as revenue only in the year 2013-14.

(6) AS 6: Depreciation Accounting

Depreciation is provided under Straight Line Method as per the Schedule XIV of the Companies Act, 1956, after identifying the units constituting continuous process plants for applying appropriate rates of depreciation. The specified period for assets as on April 1, 1993, has been calculated by allocating unamortised value as on that date as per the books over the recomputed specified period.

With respect to the assets of Autolec Division, Chennai acquired by the Company under the Scheme of Amalgamation, depreciation has been charged under Straight Line/ Written Down Value Method as follows:

a) For Assets acquired before 31st March 1991, depreciation has been charged at Written down value Method as per Schedule XIV rates prevailing during that period.

b) For assets acquired after 1st April 1991 but before 31st March 1993 depreciation has been charged at Straight Line Method as per Schedule XIV rates prevailing during that period.

c) With regard to additions to assets after 1st April 1993, depreciation is charged on Straight Line Method at the new rates prescribed.

Cost of Leasehold lands are amortised over the period of lease.

Technical know-how fees is amortised over the agreement period.

(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. Domestic sales are recognised on the basis of sale invoices raised which is after physical clearance of goods sold.

Export sales are recognised on the basis of date of bills of lading and let export certification. Export benefits are recognised on post shipment basis.

The revenue and expenditure are accounted on a going concern basis.

Interest incomes/expenses are recognised using the time proportion method based on the rates implicit in the transaction.

Dividend income is recognised when the right to receive dividend is established.

(10) AS 10: Accounting for fixed assets

The gross blocks of fixed assets are disclosed at the cost of acquisition, which includes taxes, duties (net of excise duty credit availed) and other identifiable direct expenses incurred up to 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 prevailing on close of the accounting year.

Export sale realisations are accounted at actual and those not realised within the accounting year are stated at rates prevailing on close of the accounting year.

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 2,589.04 lakhs (Rs 4,838.33 lakhs loss in the previous year).

(12) AS 12: Accounting for Government grants

The Company has not received any grant from the Government.

(13) AS 13: Accounting of Investments

(a) Investments are accounted at the cost of acquisition which includes stamp fees, etc. All the investments are long term investments. 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 49 of the Act, in respect of shares held in subsidiary companies through the nominees.

(c) Provision made towards diminution in the value of investments in subsidiaries are as follows:

(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 887.74 lakhs previous year Rs 767.83 lakhs

ii) Employer''s Contribution to Superannuation Fund during the year Rs 76.63 lakhs previous year Rs 92.14 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 needs to be treated as defined benefit plan. The net liability due to interest shortfall determined under paragraphs 58 & 59 of AS-15 (Revised) amounting to Rs 19.08 lakhs has been provided for.

(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 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 cost

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 same segment which are subject to similar risks and returns.

(18) AS 18: Related party disclosures

(I) Where Control exists:

(A) Subsidiary Companies Domestic Subsidiaries

1. Sundram Fasteners Investments Ltd., Chennai, 2. Upasana Engineering Ltd., Chennai, 3. Sundram Non-Conventional Energy Systems Ltd., Chennai, 4. Sundram Bleistahl Ltd, Chennai.

Foreign Companies

1. Cramlington Precision Forge Ltd., Northumberland, United Kingdom, 2. Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia, 3. Sundram Fasteners (Zhejiang) Ltd., Peoples Republic of China,

4. Sundram International Inc, Michigan, USA, 5. TVS Peiner Services, GmbH (formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany, 6. Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany and 7. PUT Grundstucks GmbH, Peine, Federal Republic of Germany.

(B) Associate

1. TVS Infotech Ltd., Chennai, 2. TVS Infotech Inc, Michigan, USA (Subsidiary of associate),

3. TV Sundram Iyengar & Sons Ltd., Madurai and 4. Southern Roadways Ltd., Madurai

C) Joint Venture

Windbolt GmbH, Germany

(II) Other Related Parties with whom transactions have been entered into during the year :

(A) Key Management Personnel

Mr Suresh Krishna, Ms Arathi Krishna and Ms Arundathi Krishna

(B) Relatives of Key Management Personnel

Ms Usha Krishna and Ms Preethi Krishna

(C) Enterprise in which Key Management Personnel have significant influence

Upasana Finance Limited, Chennai

(19) AS 19: Accounting for Leases

The company has entered into lease agreements for a period up to five years, which are in the nature of operating leases as defined in the Accounting Standard prescribed by the Institute of Chartered Accountants of India.

(a) Future minimum lease payments under non cancellable operating leases in respect of lease agreements entered into on or after 01.04.2001:

(b) During the year Rs.429.06 lakhs (Rs.183.25 lakhs) of Lease payments recognised in the statement of profit and loss, in respect of operating lease agreements entered into on or after 01.04.2001 as well as share of lease rent for aircraft under joint ownership.

(c) Significant Leasing arrangements :

The Company has entered into leasing arrangements in respect of vehicles and data processing equipments.

(i) Basis of determining contingent rent :

Contingent rents are payable for excessive, improper or unauthorised use of the asset, beyond the terms of the lease agreement, prejudicially affecting the resale value of the asset, either by way of increase in lease rentals or by way of lump-sum amount, as agreed between the parties.

(ii) Renewal / purchase options and escalation clauses :

Lease agreements are renewable for further period or periods on terms and conditions mutually agreed between the parties. Variations in lease rentals are made in the event of a change in the basis of computation of lease rentals by the lessor.

(iii) There are no restrictions imposed by the lease arrangements, concerning dividends, additional debt and further leasing.

(21) AS 21: Consolidated financial statements

Consolidated financial statements of the Company and its subsidiaries, viz.

Domestic Subsidiaries

1. Sundram Fasteners Investments Ltd., Chennai, 2. Upasana Engineering Ltd., Chennai, 3. Sundram Non- Conventional Energy Systems Ltd., Chennai, 4. Sundram Bleistahl Ltd, Chennai.

Foreign Companies

1. Cramlington Precision Forge Ltd., Northumberland, United Kingdom, 2. Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia, 3. Sundram Fasteners (Zhejiang) Ltd., Peoples Republic of China, 4. Sundram International Inc, Michigan, USA, 5. TVS Peiner Services, GmbH (formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany, 6. Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany and 7. PUT Grundstucks GmbH, Peine, Federal Republic of Germany are annexed.

(22) 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 carrying amount of deferred tax assets are reviewed 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.

(23) AS 23: Accounting for Investments in associates in Consolidated Financial Statements

TVS Infotech Limited, Chennai and TVS Infotech Inc, Michigan, USA (formerly TVS International Inc) are associates of the Company and have been considered in the preparation of the Consolidated Financial Statements of the Company.

(24) AS 24: Discontinuing Operations

The Company has not discontinued any operations during the year.

(25) 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 subjected to a limited review by the auditors as required by SEBI.

(26) 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.

The company had entered into a Technical agreement for manufacture of tappets, the Technical Know how fees paid for acquiring Technical Know how has been grouped under Technical Know how fees.

(27) AS 27: Financial Reporting of Interests in Joint Ventures

A) The Company has entered into joint venture agreements with T V Sundram Iyengar and Sons Limited, Madurai and Madras Cements Limited, Chennai for utilisation of Aircraft for business purposes. The agreement involves joint control and ownership of the aircraft by the ventures. The Company''s share of jointly controlled asset and expenditure have been recognised in the books of accounts as detailed below :

B) The Company has invested in Wind Bolt GmbH, Hohenstein-Ernstthal, Germany for manufacture of special bolts for wind energy applications under 50:50 Joint Venture arrangement with Mr.Wolfgang Walter Naumann, Germany. The share of interest in Joint Venture has been accounted in consolidated accounts by using the proportionate consolidation method as per Accounting Standard (AS) 27 - "Financial Reporting of Interest in Joint Ventures".

(28) AS 28: Impairment of Assets

At the Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the Company''s fixed assets. If any such indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. After recognition of impairment loss, the depreciation charge for the asset is adjusted in future periods to allocate the asset''s revised carrying amount, less its residual value if any, on straight line basis over its remaining useful life.

During the year there is no impairment of assets accounted.


Mar 31, 2012

(1) AS 1: Disclosure on accounting policies

The accounts are maintained on accrual basis as a going concern.

(2) AS 2: Valuation of inventories

Inventories are valued at lower of cost or net realisable value. Cost is ascertained on weighted average basis in accordance with the method of valuation prescribed 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 their present location and condition. Work-in-Process and finished goods include conversion costs in addition to the landed cost of raw materials.

(3) AS 3: Cash flow statements

Pursuant to the listing agreement with Stock Exchanges, Cash Flow statement is attached to the Balance Sheet and Statement of Profit and Loss.

(4) AS 5: Net profit or loss for the period, prior period items and changes in accounting policies

(i) Net profit for the period

All items of income and expense in the period are included in the determination of net profit for the period, unless specifically mentioned elsewhere in the financial statements or is required by an Accounting Standard.

(5) AS 6: Depreciation Accounting

Depreciation is provided under Straight Line Method as per the amended Schedule XIV of the Companies Act, 1956, after identifying the units constituting continuous process plants for applying appropriate rates of depreciation. The specified period for assets as on April 1, 1993 has been calculated by allocating unamortised value as on that date as per the books over the recomputed specified period.

With respect to the assets of Autolec Division, Chennai, acquired by the Company under the Scheme of Amalgamation, depreciation has been charged under Straight Line/Written Down Value Method as follows:

a) For Assets acquired before 31st March 1991, depreciation has been charged at Written Down Value Method as per Schedule XIV rates prevailing during that period.

b) For assets acquired after 1st April 1991 but before 31st March 1993, depreciation has been charged at Straight Line Method as per Schedule XIV rates prevailing during that period.

c) With regard to additions to assets after 1st April 1993, depreciation is charged on Straight Line Method at the new rates prescribed.

Cost of Leasehold lands are amortised over the period of lease. Technical know-how fees has been amortised over the agreement period.

(6) AS 7: Accounting for Construction Contracts

This standard is not applicable to the Company as it is not engaged in the business of construction.

(7) 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.

(8) AS 9: Revenue recognition

Income of the Company is derived from sale of products and includes excise duty and realised exchange fluctuations on exports and is net of sales returns, trade and cash discounts. Domestic sales are recognised on the basis of sale invoices raised which is after physical clearance of goods sold.

Export sales are recognised on the basis of date of bills of lading. Export sales are accounted including / deducting exchange gain or loss and export benefits are recognised on post shipment basis.

The revenue and expenditure are accounted on a going concern basis.

Interest incomes/expenses are recognised using the time proportion method based on the rates implicit in the transaction.

Dividend income is recognised when the right to receive dividend is established.

(9) AS 10: Accounting for fixed assets

The gross blocks of fixed assets are disclosed 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.

(10) AS 11: Accounting for effects in foreign exchange rates

Transaction 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 prevailing on close of the accounting year.

Export sale realisations are accounted at actuals and those not realised within the accounting year are stated at rates prevailing on close of the accounting year.

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 profit and loss account.

Net exchange difference is recognised in the Statement of Profit and Loss - Loss of Rs 4,838.33 lakhs (Rs 902.88 lakhs loss in the previous year.)

(11) AS 12: Accounting for Government grants

The Company has not received any grant from the Government.

(12) AS 13: Accounting of Investments

(a) Investments are accounted at the cost of acquisition which includes stamp fees, etc. All the investments are long term investments. 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) Provision made towards diminution in the value of investments in subsidiaries.

(13) AS 14: Accounting for amalgamations

This standard is not applicable as there was no amalgamation during the year.

(14) 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

(B) Defined Benefit Plan

(i) Gratuity

Retirement benefit in the form of Gratuity Liability (being administered by LIC) 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 recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the Gratuity.

The principal plan assets consists of a scheme of insurance taken by the Trust, which is a qualifying policy. Break-down of individual investments that comprise the total plan assets is not supplied by the insurer.

(ii) Leave Salary - Compensated Absences

The Company also extends defined benefit plans in the form of Compensated absences to employees. Provision for Compensated absences is made on actuarial valuation basis.

The Employee Benefits towards Compensated absences are provided based on actuarial valuation made at the end of the year.

(15) AS 16: Borrowing cost

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 Profit and Loss account 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 period.

(16) AS 17: Segment reporting

The Company operates in the same segment which are subject to similar risks and returns.

(17) AS 18: Related party disclosure

(I) Where Control exists:

(A) Subsidiary Companies

1. Sundram Fasteners Investments Ltd., Chennai,

2. Cramlington Precision Forge Ltd., Northumberland, United Kingdom,

3. Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia,

4. Upasana Engineering Ltd., Chennai, 5. Sundram Fasteners (Zhejiang) Ltd., Peoples Republic of China, 6. Sundram Non-Conventional Energy Systems Ltd., Chennai, 7. Sundram Bleistahl Ltd, Chennai, 8. Sundram International Inc, Michigan, USA, 9. TVS Peiner Services, GmbH (formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany, 10. Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany and 11. PUT Grundstucks GmbH, Peine, Federal Republic of Germany.

(B) Associate

1. TVS Infotech Ltd., Chennai,

2. TVS Infotech Inc, Michigan, USA,

3. T V Sundram Iyengar & Sons Ltd., Madurai and

4. Southern Roadways Ltd., Madurai.

C) Joint Venture

Windbolt GmbH, Germany

(II) Other Related Parties with whom transactions have been entered into during the year :

(A) Key Management Personnel

Mr Suresh Krishna Ms Arathi Krishna Ms Arundathi Krishna

(B) Relatives of Key Management Personnel

Ms Usha Krishna Ms Preethi Krishna

(C) Enterprise in which Key Management Personnel have significant influence

Upasana Finance Limited, Chennai

(c) Significant Leasing arrangements :

The Company has entered into leasing arrangements in respect of vehicles and data processing equipments.

(i) Basis of determining contingent rent :

Contingent rents are payable for excessive, improper or unauthorised use of the asset, beyond the terms of the lease agreement, prejudicially affecting the resale value of the asset, either by way of increase in lease rentals or by way of lump-sum amount, as agreed between the parties.

(ii) Renewal/purchase options and escalation clauses :

Lease agreements are renewable for further period or periods on terms and conditions mutually agreed between the parties. Variations in lease rentals are made in the event of a change in the basis of computation of lease rentals by the lessor.

(20) AS 21: Consolidated financial statements

Consolidated financial statements of the Company and its subsidiaries, viz.

a) Sundram Fasteners Investments Ltd., Chennai, b) Upasana Engineering Ltd., Chennai c) Sundram Fasteners (Zhejiang) Ltd., People's Republic of China, d) Cramlington Precision Forge Ltd., Northumberland, UK,

e) Sundram Non-Conventional Energy Systems Ltd., Chennai, f) Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia, g) Sundram International Inc, Michigan, USA, h) Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany, i) PUT Grundstucks, GmbH, Peine, Federal Republic of Germany, j) Sundram

Bleistahl Ltd., Chennai and k) TVS Peiner Services GmbH (formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany are annexed.

(21) AS 22: Accounting for taxes on income

Refer Note 4 to the Financial Statements

Tax expense comprises of current and deferred. Current income tax is measured at 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 carrying amount of deferred tax assets are reviewed 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.

(22) AS 23: Accounting for Investments in associates

TVS Infotech Ltd, Chennai and TVS Infotech Inc, Michigan, USA (formerly TVS International Inc) are associates of the Company and have been considered in the preparation of the Consolidated Financial Statements of the Company.

(23) AS 24: Discontinuing Operations

The Company has not discontinued any operation during the year.

(24) 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 subjected to a limited review by the auditors as required by SEBI.

(25) 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 1-4-2003, the amount capitalised has been amortised over the currency of the collaboration agreement.

The Company had entered into a Technical agreement for manufacture of Valve Lifters, the technical know-how fees paid for acquiring Technical Know-how has been grouped under Technical Know-how fees.

(26) AS 27: Financial Reporting of Interests in Joint Ventures

A) The Company has entered into joint venture agreement with TV Sundram Iyengar & Sons Ltd, Madurai and Madras Cements Ltd, Chennai for utilisation of Aircraft for business purposes. The agreement involves joint control and ownership of the aircraft by the venturers. The Company's share of jointly controlled asset and expenditure have been recognised in the books of accounts as detailed below :

B) During the year, the Company has invested EUR 33,332 (Rs 22.22 lakhs) in Windbolt GmbH, Hohenstein-Ernstthal, Germany for manufacture of special bolts for wind energy applications under 50:50 Joint Venture arrangement with Mr. Wolfgang Walter Naumann. The share of interest in Joint Venture has been accounted in consolidated accounts by using the proportionate consolidation method as per Accounting Standard (AS) 27 - "Financial Reporting of Interest in Joint Ventures".

(29) (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 211 (3C) of the Companies Act, 1956.

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 prevail 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.


Mar 31, 2011

1. Accounting policies / compliance of Accounting Standards issued by the Institute of Chartered Accountants of India

(1) AS 1: Disclosure on accounting policies

The accounts are maintained on accrual basis as a going concern.

(2) AS 2: Valuation of inventories

Inventories are valued at lower of cost or net realisable value. Cost is ascertained on weighted average basis in accordance with the method of valuation prescribed 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 their present location and condition. Work-in-process and finished goods include conversion costs in addition to the landed cost of raw materials.

(3) AS 3: Cash flow statements

Pursuant to the listing agreement with Stock Exchanges, Cash Flow statement is attached to the Balance Sheet and Profit and Loss account.

(4) AS 5: Net profit or loss for the period, prior period items and changes in accounting policies

(i) Net profit for the period

All items of income and expense in the period are included in the determination of net profit for the period, unless specifically mentioned elsewhere in the financial statements or is required by an Accounting Standard.

(5) AS 6: Depreciation Accounting

Depreciation is provided under Straight Line Method as per the amended Schedule XIV of the Companies Act, 1956, after identifying the units constituting continuous process plants for applying appropriate rates of

depreciation. The specified period for assets as on April 1, 1993 has been calculated by allocating unamortized value as on that date as per the books over the recomputed specified period.

With respect to the assets of Autolec Division, Chennai, acquired by the Company under the Scheme of Amalgamation, depreciation has been charged under Straight Line/Written Down Value Method as follows:

a) For Assets acquired before 31st March 1991, depreciation has been charged at Written Down Value Method as per Schedule XIV rates prevailing during that period.

b) For assets acquired after 1st April 1991 but before 31st March 1993, depreciation has been charged at Straight Line Method as per Schedule XIV rates prevailing during that period.

c) With regard to additions to assets after 1st April 1993, depreciation is charged on Straight Line Method at the new rates prescribed.

Cost of Leasehold lands are amortised over the period of lease. Technical know-how fees has been amortised over the agreement period.

(6) AS 7: Accounting for Construction Contracts

This standard is not applicable to the Company as it is not engaged in the business of construction.

(7) 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.

(8) AS 9: Revenue recognition

Income of the Company is derived from sale of products and includes excise duty and realised exchange fluctuations on exports and is net of sales returns, trade and cash discounts. Domestic sales are recognised on the basis of sale invoices raised which is after physical clearance of goods sold.

Export sales are recognised on the basis of date of bills of lading. Export sales are accounted including/deducting exchange gain or loss and export benefits are recognised on post shipment basis.

The revenue and expenditure are accounted on a going concern basis.

Interest incomes/expenses are recognised using the time proportion method based on the rates implicit in the transaction.

Dividend income is recognised when the right to receive dividend is established.

(9) AS 10: Accounting for fixed assets

The gross blocks of fixed assets are disclosed 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. Capital work-in-progress includes capital advances. Borrowing costs relating to acquistion 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.

(10) AS 11: Accounting for effects in foreign exchange rates

Transaction 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 prevailing on close of the accounting year.

Export sale realisations are accounted at actuals and those not realised within the accounting year are stated at rates prevailing on close of the accounting year.

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 profit and loss account.

(11) AS 12: Accounting for Government grants The Company has not received any grant from the Government.

(12) AS 13: Accounting of Investments

(a) Investments are accounted at the cost of acquisition which includes stamp fees, etc. All the investments are long term investments. 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.

(13) AS 14: Accounting for amalgamations

This standard is not applicable as there was no amalgamation during the year.

(14) 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.

The Company's Provident Fund is exempted under Section 17 of Employees Provident Fund Act, 1952. Conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the trust vis-a-vis required rate.

(B) Defined Benefit Plan

(i) Gratuity

Retirement benefit in the form of Gratuity Liability (being administered by LIC) 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 recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the Gratuity.

(ii) Leave Salary - Compensated Absences

The Company also extends defined benefit plans in the form of Compensated absences to employees. Provision for Compensated absences is made on actuarial valuation basis.

The Employee Benefits towards Compensated absences are provided based on actuarial valuation made at the end of the year.

(15) AS 16: Borrowing cost

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 Profit and Loss account 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.

(16) AS 17: Segment reporting

The Company operates in the same segment which are subject to similar risks and returns.

(17) AS 18: Related party disclosureRelated Parties:

(I) Where Control exists:

(A) Subsidiary Companies

Sundram Fasteners Investments Ltd, Chennai

Cramlington Precision Forge Ltd, Northumberland, United Kingdom

Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia

Upasana Engineering Ltd, Chennai

Sundram Fasteners (Zhejiang) Ltd, Peoples Republic of China

Sundram Non-Conventional Energy Systems Ltd, Chennai

Sundram Bleistahl Ltd, Chennai

Sundram International Inc, Michigan, USA

TVS Peiner Services, GmbH (formerly Peiner Logistik GmbH), Peine, Federal Republic of Germany

Peiner Umformtechnik GmbH, Peine, Federal Republic of Germany

PUT Grundstucks GmbH, Peine, Federal Republic of Germany

(B) Associates

TVS Infotech Ltd, Chennai

TVS Infotech Inc, Michigan, USA

TV Sundram Iyengar & Sons Ltd, Madurai

Southern Roadways Ltd, Madurai

(II) Other Related Parties with whom transactions have been entered into during the year :

(A) Key Management Personnel

Mr Suresh Krishna Ms Arathi Krishna MsArundathi Krishna

(B) Relatives of Key Management Personnel

Ms Usha Krishna Ms Preethi Krishna

(C) Enterprise in which Key Management Personnel have significant influence Upasana Finance Limited, Chennai

(i) Basis of determining contingent rent:

Contingent rents are payable for excessive, improper or unauthorised use of the asset, beyond the terms of the lease agreement, prejudicially affecting the resale value of the asset, either by way of increase in lease rentals or by way of lump-sum amount, as agreed between the parties.

(ii) Renewal/purchase options and escalation clauses:

Lease agreements are renewable for further period or periods on terms and conditions mutually agreed between the parties. Variations in lease rentals are made in the event of a change in the basis of computation of lease rentals by the lessor.

(iii) There are no restrictions imposed by the lease arrangements, concerning dividends, additional debt and further leasing.

(20) AS 21: Consolidated financial statements

Consolidated financial statements of the Company and its subsidiaries, viz.

a) Sundram Fasteners Investments Ltd, Chennai

b) Upasana Engineering Ltd, Chennai

c) Sundram Fasteners (Zhejiang) Ltd, People's Republic of China

d) Cramlington Precision Forge Ltd, Northumberland, UK

e) Sundram Non-Conventional Energy Systems Ltd, Chennai

f) Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia

g) Sundram International Inc, Michigan, USA

h) PeinerUmformtechnikGmbH, Peine, Federal Republic of Germany

(21) AS 22: Accounting for taxes on income

Refer Schedule V to the Accounts

Tax expense comprises of current and deferred. Current income tax is measured at 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 acconting income for the year and reversal of timing diferences of earlier years.

The carrying amount of deferred tax assets are reviewed 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.

(22) AS 23: Accounting for Investments in associates

TVS Infotech Ltd, Chennai and TVS Infotech Inc, Michigan, USA (formerly TVS International Inc) are identified as associates of the Company and have been considered in the preparation of the Consolidated Financial Statements of the Company.

(23) AS 24: Discontinuing Operations

The Company has not discontinued any operations during the year.

(24) 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 subjected to a limited review by the auditors as required by SEBI.

(25) 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 1-4-2003, the amount capitalised has been amortised over the currency of the collaboration agreement.

(26) AS 27: Financial Reporting of Interests in Joint Ventures

The Company has entered into joint venture agreement with TV Sundram Iyengar & Sons Ltd, Madurai and Madras Cements Ltd, Chennai for utilisation of Aircraft for business purposes. The agreement involves joint control and ownership of the aircraft by the venturers.

(28) AS 29: Provisions, Contingent Liabilities and Contingent Assets (i) Contingent Liabilities:


Mar 31, 2010

1. Accounting policies / compliance of Accounting Standards issued by the Institute of Chartered Accountants of India

(1) AS 1: Disclosure on accounting policies

The accounts are maintained on accrual basis as a going concern.

(2) AS 2: Valuation of inventories

Inventories are valued at lower of cost or net realisable value. Cost is ascertained on weighted average basis in accordance with the method of valuation prescribed 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 their present location and condition. Work-in-process and finished goods include conversion costs in addition to the landed cost of raw materials.

(3) AS 3: Cash flow statements

Pursuant to the listing agreement with Stock Exchanges, Cash Flow statement is attached to the Balance Sheet and Profit and Loss account.

(4) AS 5: Net profit or loss for the period, prior period items and changes in accounting policies

(i) Net profit for the period

All items of income and expense in the period are included in the determination of net profit for the period, unless specifically mentioned elsewhere in the financial statements or is required by an Accounting Standard.

(5) AS 6: Depreciation Accounting

Depreciation is provided under Straight Line Method as per the amended Schedule XIV of the Companies Act, 1956, after identifying the units constituting continuous process plants for applying appropriate rates of depreciation. The specified period for assets as on April 1, 1993 has been calculated by allocating unamortised value as on that date as per the books over the recomputed specified period.

With respect to the assets of Autolec Division, Chennai, acquired by the Company under the Scheme of Amalgamation, depreciation has been charged under Straight Line/Written Down Value Method as follows:

a) For Assets acquired before 31st March 1991, depreciation has been charged at Written Down Value Method as per Schedule XIV rates prevailing during that period.

b) For assets acquired after 1st April 1991 but before 31st March 1993, depreciation has been charged at Straight Line Method as per Schedule XIV rates prevailing during that period.

c) With regard to additions to assets after 1st April 1993, depreciation is charged on Straight Line Method at the new rates prescribed.

Cost of Leasehold lands are amortised over the period of lease. Technical know-how fees has been amortised over the agreement period.

(6) 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.

(7) 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.

(8) AS 9: Revenue recognition

Income of the Company is derived from sale of products and includes excise duty and realised exchange fluctuations on exports and is net of sales returns, trade and cash discounts. Domestic sales are recognised on the basis of sale invoices raised which is after physical clearance of goods sold.

Export sales are recognised on the basis of date of bills of lading. Export sales are accounted including / deducting exchange gain or loss and export benefits are recognised on post shipment basis.

The revenue and expenditure are accounted on a going concern basis.

Interest incomes/expenses are recognised using the time proportion method based on the rates implicit in the transaction.

Dividend income is recognised when the right to receive dividend is established.

(10) AS 11: Accounting for effects in foreign exchange rates

Transaction on account of import of raw materials and other inputs are accounted based on the actual liability incurred if the transactions are settledwithin the accounting year. Such transactions not settled during the accounting year are accounted on rates prevailing on close of the accounting year.

Export sale realisations are accounted at actuals and those not realised within the accounting year are stated at rates prevailing on close of the accounting year.

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 profit and loss account.

(11) AS 12: Accounting for Government grants

The Company has not received any grant from the Government.

(12) AS 13: Accounting of Investments

(a) Investments are accounted at the cost of acquisition which includes stamp fees, etc. All the investments are long term investments. 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.

(13) AS 14: Accounting for amalgamations

The above standard is not applicable as there was no amalgamation during the year.

(14) 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.

The Companys Provident Fund is exempted under Section 17 of Employees Provident Fund Act, 1952. Conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the trust vis-à-vis required rate.

(B) Defined Benefit Plan

(i) Gratuity

Retirement benefit in the form of Gratuity Liability (being administered by LIC) 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 recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the Gratuity.

The prinicipal plan assets consists of a scheme of insurance taken by the Trust, which is a qualifying policy. Break-down of individual investments that comprise the total plan assets is not supplied by the insurer.

(ii) Leave Salary - Compensated Absences

The Company also extends defined benefit plans in the form of Compensated absences to employees. Provision for Compensated absences is made on actuarial valuation basis.

The Employee Benefits towards Compensated absences are provided based on actuarial valuation made at the end of the year.

(15) AS 16: Borrowing cost

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 Profit and Loss account in the year in which it is incurred.

(16) AS 17: Segment reporting

The Company operates in the same segment which are subject to similar risks and returns.

(17) AS 18: Related party disclosure Related Parties:

(I) Where Control exists:

(A) Subsidiary Companies

Sundram Fasteners Investments Ltd., Chennai

Cramlington Precision Forge Ltd., Northumberland, United Kingdom

Sundram RBI Sdn. Bhd., Kuala Lumpur, Malaysia

Upasana Engineering Ltd., Chennai

Sundram Fasteners (Zhejiang) Ltd., Peoples Republic of China

Sundram Non-Conventional Energy Systems Limited, Chennai

Sundram Bleistahl Limited, Chennai

Sundram International Inc., Michigan, USA

Peiner Logistick GmbH, Peine, Germany

Peiner Umformtechnik GmbH, Peine, Germany

PUT Grundstücks GmbH, Peine, Germany

(B) Associates

TVS Infotech Ltd., Chennai

TVS Infotech Inc., Michigan, USA

(II) Other Related Parties with whom transactions have been entered into during the year :

(A) Key Management Personnel Mr Suresh Krishna

Ms Arathi Krishna Ms Arundathi Krishna

(B) Relatives of Key Management Personnel Ms Usha Krishna

Ms Preethi Krishna

(C) Enterprise in which Key Management Personnel have significant influence Upasana Finance Limited, Chennai

(18) AS 19: Leases

The Company has entered into lease agreements for a period upto five years, which are in the nature of operating leases as defined in the Accounting Standard prescribed by The Institute of Chartered Accountants of India.

(c) Significant Leasing arrangements :

The Company has entered into leasing arrangements in respect of vehicles and data processing equipments.

(i) Basis of determining contingent rent :

Contingent rents are payable for excessive, improper or unauthorised use of the asset, beyond the terms of the lease agreement, prejudicially affecting the resale value of the asset, either by way of increase in lease rentals or by way of lump-sum amount, as agreed between the parties.

(ii) Renewal/purchase options and escalation clauses :

Lease agreements are renewable for further period or periods on terms and conditions mutually agreed between the parties. Variations in lease rentals are made in the event of a change in the basis of computation of lease rentals by the lessor.

(iii) There are no restrictions imposed by the lease arrangements, concerning dividends, additional debt and further leasing.

19) AS 20: Earnings per share

Basic earnings per share are disclosed in the Profit and Loss account. There is no diluted earnings per share as there are no dilutive potential equity shares.

(20) AS 21: Consolidated financial statements

Consolidated financial statements of the Company and its subsidiaries, viz.

a) Sundram Fasteners Investments Limited, Chennai

b) Upasana Engineering Limited, Chennai

c) Sundram Fasteners (Zhejiang) Limited, China

d) Cramlington Precision Forge Limited, Northumberland, UK

e) Sundram Non-Conventional Energy Systems Limited, Chennai

f) Sundram RBI Sdn. Bhd, Kuala Lumpur, Malaysia (formerly RBI Autoparts Sdn. Bhd., Malaysia)

g) Sundram International Inc, Michigan, USA

h) Peiner Umformtechnik GmbH, Peine, Germany i) PUT Grundstücks GmbH, Peine, Germany j) Peiner Logistik GmbH, Germany k) Sundram Bleistahl Limited, Chennai are annexed.

(21) AS 22: Accounting for taxes on income Refer Schedule V to the Accounts

(22) AS 23: Accounting for Investments in associates

TVS Infotech Limited, Chennai and TVS Infotech Inc, Michigan, USA (formerly TVS International Inc) are identified as associates of the Company and has been considered in the preparation of the Consolidated Financial Statements of the Company.

(23) AS 24: Discontinuing Operations

The Company has not discontinued any operations during the year.

(24) 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 subjected to a limited review by the auditors as required by SEBI.

(25) 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 1-4-2003, the amount capitalised has been amortised over the currency of the collaboration agreement.

The Company entered into a Technical agreement for manufacture of Valve Lifters, the technical know-how fees paid for acquiring Technical Know-how has been grouped under Technical Know-how fees.

(26) AS 27: Financial Reporting of Interests in Joint Ventures

The Company has entered into joint venture agreement with Madras Cements Limited, T V Sundram Iyengar & Sons Limited and Thiagaraja Mills Limited for utilisation of Aircraft for business purposes. The agreement involves joint control and ownership of the aircraft by the venturers. The Companys share of jointly controlled asset and expenditure have been recognised in the books of accounts as detailed below :

(27) AS 28: Impairment of Assets

At the Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the Companys fixed assets. If any such indication exists, the assets recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. After recognition of impairment loss, the depreciation charge for the asset is adjusted in future periods to allocate the assets revised carrying amount, less its residual value, if any, on straight line basis over its remaining useful life.

 
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