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Sundaram Finance

BSE: 590071|NSE: SUNDARMFIN|ISIN: INE660A01013|SECTOR: Finance - Leasing & Hire Purchase
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« Mar 15
Notes to Accounts Year End : Mar '16
Face value of commercial paper outstanding as on 31.03.2016 was
 Rs.1050,00.00 lakhs (31.03.2015 – Rs.2314,00.00 lakhs).  Maximum amount
 of face value of commercial paper outstanding at any time during the
 period was Rs.4155,00.00 lakhs (2014-15 – Rs.3891,00.00 lakhs).
 
 a) Additions / Deductions to Freehold Land and Buildings in Gross Block
 include assets transferred to / from Investment Property.
 
 b) Additions to Intangible Assets under development in Gross Block
 include depreciation on assets used for development of Computer
 software amounting to Rs.3.90 lakhs.
 
 c) Depreciation on Assets on Finance lease Rs.0.52 lakhs (31.03.2015 –
 Rs.8.35 lakhs) has been netted off against Lease Income.
 
 d) Building on leasehold land include Rs.11,93.63 lakhs (31.03.2015 –
 Rs.11,93.63 lakhs) being the cost of ownership of fats in co-operative
 societies.
 
 e) Free hold Land and Buildings includes Rs.11,73.89 lakhs (31.03.2015
 – Rs.8,38.89 lakhs) representing undivided share of land.
 
 f) In accordance with Accounting Standard, AS-26 -Intangible Assets,
 computer software purchased /developed amounting to Rs.6,39.80 Lakhs
 (31.03.2015 – Rs.8,14.28 lakhs) is amortised over their expected useful
 life of three to fve years based on a technical evaluation.
 
 g) The depreciation additions for the previous year amounting to
 Rs.95,55.45 lakhs includes Rs.4,85.45 lakhs adjusted against Retained
 earnings on account of Transitional provision as per Schedule II of
 Companies Act 2013.
 
 Note:
 
 1) During the year, the Company acquired the entire 26% equity stake,
 being 8,19,00,000 equity shares of Rs.10/- each, held by Royal & Sun
 Alliance Insurance PLC in the equity share capital of Royal Sundaram
 Alliance Insurance Company Limited (Royal Sundaram), for a total
 consideration of Rs.450,00 lakhs. Consequent to the said acquisition,
 the holding of the Company in Royal Sundaram increased from 49.90% to
 75.90% and Royal Sundaram became the Company''s subsidiary effective
 29th July 2015. Pursuant to the above acquisition the name of Royal
 Sundaram Alliance Insurance Company Limited changed to Royal Sundaram
 General Insurance Co.  Limited effective 17th December 2015.
 
 2) In accordance with the scheme of reduction of capital approved by
 the High Court of Madras and Ministry of Corporate Affairs, Sundaram
 BNP Paribas Fund Services Limited (SBNPPFS), reduced its paid up Equity
 Share Capital, effective 1st September 2015. Consequently, the
 company''s investment of Rs.48,19.54 lakhs in the equity share capital
 of SBNPPFS (4,81,95,000 equity shares of Rs.10 each) reduced to
 Rs.12,24.15 lakhs (i.e. 1,22,41,530 equity shares of Rs.10 each) and
 the accumulated provision of Rs.35,95.39 lakhs has been adjusted
 against the cost of investment. During the year, the company subscribed
 to the rights issue of equity shares offered by SBNPPFS.
 
 3) In accordance with the terms of the Joint Venture Agreement, the
 Company sold the entire holdings on 05th August 2015 in ''BNP Paribas
 Sundaram Global Securities Operations Private Limited'' to the Joint
 Venture partner ''BNP Paribas Securities Services, Paris'' for a
 consideration of Rs.44,29.60 lakhs.
 
 4) Denotes investment where provision for diminution in value has been
 made.
 
 5) Includes 1100 partly paid shares @ Rs.50,000/- per share. (Face
 value Rs.1,00,000 per share)
 
 6) Face value in Omani Riyal.
 
 7) Reclassified under Current Investments.
 
 8) Investments in the growth option of the open-ended schemes of
 Sundaram Mutual Fund is in compliance with the seed capital
 requirements stipulated by SEBI Mutual Funds (Amendment) Regulations,
 2014 and cannot be redeemed unless the scheme is wound up.
 
 In accordance with the Reserve Bank of India directives, the company
 has created a floating charge on the statutory liquid assets comprising
 investment in Government Securities of face value Rs.253,12.30 lakhs
 (cost Rs.253,05.63 lakhs) and bank deposits of Rs.90,86.00 lakhs in
 favour of trustees representing the deposit holders of the company.
 
 Note 1: General
 
 1. Segment Reporting
 
 Segment information is presented in the Consolidated Financial
 Statements in terms of the Accounting Standard 17 - Segment Reporting.
 
 2. In November 2014, the Reserve Bank of India, issued a revised
 regulatory framework for NBFC''s, which inter alia required the asset
 classification and provisioning norms to be aligned with those for
 Banks. In March 2015, Reserve Bank of India amended the Non-Banking
 Financial (Deposit Accepting or Holding) Companies Prudential Norms,
 requiring NBFC''s to classify Non- Performing Assets based on 3 months
 overdue, by the financial year ending 31st March 2018. As a matter of
 prudence, the Company has adopted the 3 months norm, in advance, for
 the financial year ended 31st March 2016, as compared to 120 days norm
 followed in the previous financial year. This has resulted in an
 additional charge of Rs.8,06.05 lakhs (including income
 de-recognised)to the Profit before tax for the financial year.
 
 Notes:
 
 a) Royal Sundaram General Insurance Co. Limited was a Joint Venture
 company upto 28th July 2015 and has become a subsidiary since
 then.(Refer Note 12(1) of Non-Current Investments).
 
 b) The Company sold the entire holdings in ''BNP Paribas Sundaram Global
 Securities Operations Private Limited'' on 5th August 2015. (Refer Note
 12(3) of Non-Current Investments).
 
 3.  The Company has spent an amount of Rs.12,04.65 lakhs (2014-15 –
 Rs.9,13.95 lakhs) towards Corporate Social Responsibility (CSR) under
 Sec 135 of the Companies Act 2013, in the various areas covered under
 the regulatory provisions like healthcare, education, environment and
 protection of art and culture.
 
 4. The pending litigations as on 31st March 2016 have been compiled
 by the company and reviewed by the Statutory Auditors.  The current
 position of the litigation has been evaluated and the effect thereof
 has been appropriately disclosed in the financial statements.
 
 5. In respect of a lease transaction, the Company preferred appeals
 in the earlier years, against the demands raised by Commissioner of
 Customs / CESTAT / Appellate Tribunal for Foreign Exchange, towards
 duty and penalty, aggregating to Rs.63.79 lakhs.
 
 6. Estimated amount of contracts remaining to be executed on capital
 account Rs.2,89.49 lakhs (net of advances of Rs.3,27.83 lakhs)
 (31.03.2015 – Rs.3,12.65 lakhs, net of advances of Rs.6,11.87 lakhs)
 Investment in Partly paid-up Equity shares Rs.5,50.00 lakhs (31.03.2015
 – Rs.5,50.00 lakhs).
 
 7. Based on the current assessment of the long-term contracts in the
 ordinary course of business, the Company has made adequate provision
 for losses where required. The derivative contracts have been entered
 into for hedging the foreign currency liability and interest liability.
 Derivative contracts being in the nature of hedge contracts, the
 Company does not anticipate any material losses from the same.
 
 8. Exchange Traded Interest Rate (IR) Derivatives : NIL
 
 9. Qualitative disclosures on risk exposure of derivatives
 
 i) Qualitative disclosures
 
 The Company has a Board approved policy for entering into derivative
 transactions. Derivative transaction comprises Forward Rate Agreements,
 Interest Rate Swaps, Coupon Only Swaps and Forward Exchange contracts.
 The Company undertakes such transactions for hedging balance sheet
 assets and liabilities. Such outstanding derivative transactions are
 accounted on accrual basis over the life of the underlying instrument.
 The Asset Liability Management Committee and Risk Management Committee
 periodically monitors and reviews the risks involved.
 
 10.  Details of Financial Assets Sold to Securitisation /
 Reconstruction Company for Asset Reconstruction : NIL
 
 11.  Details of non-performing financial assets purchased / sold :
 NIL
 
 12. Details of financing of parent company products NIL
 
 13. Details of Single Borrower Limit (SBL) /
 
 Group Borrower Limit (GBL) exceeded by the company NIL
 
 14. Registration obtained from other financial sector regulators
 Insurance Regulatory and Development
 
 Authority – Corporate Agency
 
 15. Disclosure of penalties imposed by RBI and other regulators NIL
 
 16.  Overseas Assets (for those with Joint Ventures and Subsidiaries
 abroad) : NIL
 
 17. Off-balance sheet SPVs sponsored (which are required to be
 consolidated as per accounting norms) : NIL
 
 Note 18: Disclosure on frauds
 
 During the year, four instances of fraud committed by customers, in the
 nature of cheating and forgery, aggregating to Rs.5,04.17 lakhs were
 detected and reported to Reserve Bank of India. The amount has been
 fully provided after considering recoveries to the extent of Rs.2,64.69
 lakhs, while the company has proceeded legally to recover the balance
 dues.
 
 Note 19: Previous year figures have been regrouped / reclassified
 wherever necessary to conform to the current year''s presentation.
Source : Dion Global Solutions Limited
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