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141 views63 pagesConsolidated Financial Result Document N086K6
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/ 63
Walker Chandiok &Co LLP
Walker Chandlok & Co LLP
2st Foor, OLF Square
“Jacaranda Marg, DLF Phase
‘Gurugram 122 002
nia
991 124462 8000
491 124462 8001
Independent Auditor's Report
To the Members of Sona BLW Precision Forgings Limited
Report on the Audit of the Consolidated Financial Statements
Qualified Opinion
1. We have audited the accompanying consolidated financial statements of Sona BLW Precision Forgings
Limited (the Holding Company’) and its subsidiaries (the Holding Company and its subsiciaries together
referred to as ‘the Group), as listed in Annexure I, which comprise the Consolidated Balance Sheet as
at 31 March 2020, the Consolidated Statement of Profit and Loss (including Other Comprehensive
Income), the Consolidated Cash Flow Statement and the Consolidated Statement of Changes in Equity
for the year then ended, and a summary of the significant accounting policies and other explanatory
information.
2. In our opinion and to the best of our information and according to the explanations given to us and
based cn the consideration ofthe report of the other auditors on separate financial statements and on
the other financial information of the subsidiaries, except for the possible effects of the matter described
in the Basis for Qualified Opinion section of our report, the aforesaid consolidated financial statements
give the information required by the Companies Act, 2013 (‘Act) in the manner so required and give a
‘rue and fair view in conformity with the accounting principles generally accepted in India including
Indian Accounting Standards (Ind AS!) specified under section 133 of the Act, ofthe consolidated state
of affairs of the Group, as at 31 March 2020, and their consolidated profit (including other
comprehensive income), consolidated cash flows and the consolidated changes in equity for the year
ended on that date.
Basis for Qualified Opinion
3. As stated in note 49 to the accompanying consolidated financial statements, the majority shareholding
in Sona Holdings B.V., The Netherlands, the erstwnile subsidiary company, which was classified as a
‘discontinued operation’ in the consolidated financial statements for previous year ended 31 March
2019, was sold to Sona Autocomp Holdings Private Limited on 4 July 2019, and the Holding Company
therefore, did not exercise control over the erstwnile subsidiary company from 6 July 2020 onwards .
(Owing to the unavailabilty ofthe consolidated financial statements of such subsidiary company and its
subsidiaries (SONA BV Group’) for the period 1 April 2019 to 4 July 2019, the consolidated financial
information of SONA BV Group for the period 1 April 2019 to 4 July 2019 (the current year period’ has
rot been included in the accompanying consolidated financial statements for the year ended 31 March
2020, and the assets and liabiliies of SONA BV Group have been derecognized at their respective
carrying values as at 31 March 2019 instead of 4 July 2019. The said accounting treatment is not in
compliance with the requirements of Ind AS 110 - Consolidated Financial Statements.
‘ats Cn oP ni
ine hacen an ge cn
eet Brot, Capa, Cha Guugu, Hye Kam Rok ree Rare Walker Chandiok &Co LLP
Had the accompanying consolidated financial statements been prepared after considering the
consolidated financial statements of SONA BV Group for the period 1 April 2019 to 4 July 2019, the
“Profit or Loss from discontinued operations" would have been higher and “Exceptional Item” would
have been lower by the same amount with no effect on the consolidated profit ofthe Group for the year
ended 31 March 2020 and its equity attributable to the owners on that date. However, in absence of
necessary financial information, we are unable to quantify such impact on the said items in the
accompanying consolidated financial statements, and the consequential impact thereof, on the
disclosures given under Note 49 as per the requirements of Ind AS 105, Non-current Assets Held for
Sale and Discontinued Operations,
4, We conducted our audit in accordance with the Standards on Auditing specified under section 143(10)
of the Act. Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are
independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered
‘Accountants of India (1CA\’) together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained and the audit evidence obtained by the other aucitors in terms.
of their reports referred to in paragraph 12 of the Other Matter section below, is sufficient and
‘appropriate to provide a basis for our qualified opinion.
Information other than the Consolidated Financial Statements and Auditor's Report thereon
5. The Holding Company's Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual Report, but does not include the
‘consolidated financial statements and our auditor's report thereon. The Annual Report is expected to
be made available to us after the date of this auditor's report.
ur opinion on the consolidated financial statements does not cover the other information and we do
Not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibilty is to read the
‘other information and, in doing so, consider whether the other information is materially inconsistent with
the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance,
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
6. The accompanying consolidated financial statements have been approved by the Holding Company's
Board of Directors, The Holding Company's Board of Directors is responsible for the matters stated in
section 134(6) ofthe Act with respect to the preparation of these consolidated financial statements that
give a true and fair view of the consolidated financial position, consolidated financial performance
including other comprehensive income, consolidated changes in equity and consolidated cash flows of
the Group in accordance with the accounting principles generally accepted in India, including the Ind
[AS specified under section 133 of the Act. The Holding Company's Board of Directors is also
responsible for ensuring accuracy of records including financial information considered necessary for
the preparation of consolidated Ind AS financial statements. Further, in terms of the provisions of the
‘Act, the respective Board of Directors /management of the companies included in the Group, covered
under the Act are responsible for maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design, implementation and maintenance of adequate
intemal financial controls, that were operating effectively for ensuring the accuracy and completeness
ofthe accounting records, relevant to the preparation and presentation of the financial statements that
give a true and far View and are free from material misstatement, whether due to fraud or error. These Walker Chandiok &Co LLP
10.
financial statements have been used for the purpose of preparation of the consolidated financial
statements by the Directors of the Holding Company, as aforesaid
In preparing the consolidated financial statements, the respective Board of Directors of the companies
included in the Group are responsible for assessing the ability of the Group to continue as a going
concem, disclosing, as applicable, matters related to going concem and using the going concem basis.
of accounting unless the Board of Directors either intend to liquidate the Group or to cease operations,
or has no realistic alternative but to do so.
‘Those Board of Directors are also responsible for overseeing the financial reporting process of the
‘companies included in the Group.
‘Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with Standards on Auditing will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
{As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and
professional skepticism throughout the audit. We also:
‘+ Identity and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override:
of internal contro;
‘+ Obtain an understanding of internal control relevant tothe audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)()) of the Act, we are also
responsible for expressing our opinion on whether the Holding Company has adequate internal
financial controls with reference to financial statements in place and the operating effectiveness of
such controls;
‘+ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management;
+ Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the abiity of the Group to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor's report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modity our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor's report. However, future events or conditions may cause the Group to
cease to continue as a going concem; and
‘+ Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
‘+ Obtain sufficient appropriate audit evidence regarding the financial information of the entities within
the Group, to express an opinion on the financial statements. We are responsible for the direction,
supervision and performance of the audit of financial statements of such entities included in the
financial statements, of which we are the independent auditors. For the other entities included in
the financial statements, which have been audited by the other auditors, such other auditors Walker Chandiok &Co LLP
remain responsible for the direction, supervision and performance of the audits carried out by
them. We remain solely responsible for our audit opinion,
11. We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
intemal control that we identify during our audit.
Other Matter
412. We did not audit the financial statements of three subsidiaries, whose financial statements reflect total
assets of 1,283 million and net assets of Z 1,028 milion as at 31 March 2020, total revenues of
% 1,325 million and net cash inflows amounting to % 56 milion for the year ended on that date, as
‘considered in the consolidated financial statements. These financial statements have been audited by
other auditors whose reports have been furnished to us by the management and our opinion on the
consolidated financial statements, in so far as it relates to the amounts and disclosures included in
respect of these subsidiaries, and our report in terms of sub-section (3) of Section 143 of the Act, in so,
far as it relates to the aforesaid subsidiaries, are based solely on the report ofthe other auditors.
Further, of these subsidiaries, two subsidiaries are located outside India whose financial statements
and other financial information have been prepared in accordance with accounting principles generally
accepted in their respective countries and which have been audited by other auditors under generally
accepted auditing standards applicable in their respective countries. The Holding Company's
management has converted the financial statements of such subsidiaries located outside India from
accounting principles generally accepted in their respective countries to accounting principles generally
accepted in India. We have audited these conversion adjustments made by the Holding Company's
management. Our opinion on the consolidated financial statements, in so far as itrelates to the balances.
and affairs of such subsidiaries located outside India, are based on the report of other auditors and the
conversion adjustments prepared by the management of the Holding Company and audited by us.
(Our opinion above on the consolidated financial statements, and our report on other legal and regulatory
requirements below, are not modified in respect of the above matters with respect to our reliance on
the work done by and the report of the other auditors.
Report on Other Legal and Regulatory Requirements
18. As required by section 197(16) ofthe Act, based on our audit and on the consideration of the report of
the other auditors, referred to in paragraph 12, on separate financial statements ofthe subsidiaries, we
report that the Holding Company and one subsidiary covered under the Act paid remuneration to their
respective directors during the year in accordance with the provisions of and limits laid down under
section 197 read with Schedule V to the Act. Further, we report that the provisions of section 197 read
with Schedule V to the Act are not applicable to a subsidiary covered under the Act, since itis not a
public company as defined under section 2(71) ofthe Act.
14, As required by Section 143 (3) ofthe Act, based on our audit and on the consideration of the report of
the other auditors on separate financial statements and other financial information ofthe subsidiaries
‘we report, to the extent applicable, that:
‘a)_ we have sought and except for the matter described in the Basis for Qualified Opinion section,
‘obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit of the aforesaid consolidated financial statements;
») in our opinion, proper books of account as required by law relating to preparation of the aforesaid
Consolidated financial statements have been kept s0 far as it appears from our examination of
those books and the report of the other auditors, except for the possible effects of the matter
described in Basis for Qualified Opinion section with respect to the financial statements of Sona
Holdings B.V., The Netherlands, erstwhile subsidiary of the Holding Company;
©) the consolidated financial statements dealt with by this report are in agreement with the relevant
books of account maintained for the purpose of preparation of the consolidated financial
tatements; Walker Chandiok &Co LLP
) except for the possible effects of the matter described in the Basis for Qualified Opinion
section, in our opinion, the aforesaid consolidated financial statements comply with Ind AS
specified under section 133 of the Act;
e) on the basis of the written representations received from the directors of the Holding Company and.
taken on record by the Board of Directors of the Holding Company and the report of the statutory
auditors of a subsidiary company covered under the Act, none of the directors of the Group
‘companies, covered under the Act, are disqualified as on 31 March 2020 from being appointed as
‘a director in terms of Section 164(2) of the Act.
4) the qualification relating to the maintenance of accounts and other matter connected therewith are
as stated in the Basis for Qualified Opinion section with respect to Sona Holdings B.V., The
Netherlands, erstwhile subsidiary of the Holding Company
9). with respect to the adequacy of the internal financial controls with reference to financial statements
of the Holding Company, and its subsidiary companies covered under the Act, and the operating
effectiveness of such controls, refer to our separate report in ‘Annexure II’; and
hh) with respect to the other matters to be included in the Auditor's Report in accordance with rule 11
of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of
Cur information and according to the explanations given to us and based on the consideration of
the report of the other auditors on separate financial statements as also the other financial
information of the subsidiaries:
i. the consolidated financial statements disclose the impact of pending litigations on the
consolidated financial position of the Group, as detailed in Note 43 to the consolidated financial
statements;
li, the Group did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses as at 31 March 2020.;
there were no amounts which were required to be transferred to the Investor Education and
Protection Fund by the Holding Company, and its subsidiary companies, covered under the
‘Act, during the year ended 31 March 2020; and
iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes
were applicable for the period from 8 November 2016 to 30 December 2016, which are not
relevant to these consolidated financial statements. Hence, reporting under this clause is not
applicable.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/NS00013
Abu
Siddharth Talwar
Partner
Membership No: 512752
UDIN: 20512752AAAAFAG636
Place: Faridabad
Date: 29 December 2020 Walker Chandiok &Co LLP
Annexure -
List of Subsidiaries included in the audited consolidated financial statements
41) Comstar Automotive Technologies Private Limited
2) Comstar Automotive USA LLC
3) Comstar Automotive Technologies Services Private Limited
4) Comstar Automotive Hong Kong Ltd.
'5) Comestel Automotive Technologies Mexicana Ltd.
6) Comstar Automotive (Hangzhou) Co., Ltd.
7) Comstar Hong Kong Mexico No. 1, LLC
8) Comenergia Automotive Technologies Mexicana, S. DE R.L. DE C.V.
8) Comestel Automotive Technofogies Mexicana, S. DE RL. DE C.V. Walker Chandiok &Co LLP
Annexure Il
Independent Auditor's Report on the internal financial controls reference to financial
statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)
1. In conjunction with our audit of the consolidated financial statements of Sona BLW Precision Forgings
Limited (the Holding Company’) and its subsidiaries (the Holding Company and its subsidiaries together
referred to as ‘the Group’), as at and for the year ended 31 March 2020, we have audited the internal
financial controls with reference to financial statements of the Holding Company and its subsidiary
company, which is a company covered under the Act, as at that date.
Responsibilities of Management and Those Charged with Governance for Internal Financial
Controls
2. The respective Board of Directors of the Holding Company, and its subsidiary company which is a
‘company covered under the Act, are responsible for establishing and maintaining internal financial
controls based on the internal control over financial reporting criteria established by the Holding Company
‘considering the essential components of internal control stated in the Guidance Note on Audit of Internal
Financial Controls over Financial Reporting ("the Guidance Note’) issued by the Institute of Chartered
Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance
of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient
conduct of the Company's business, including adherence to the Company's policies, the safeguarding of
its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as required under the Act.
ity for the Audit of the Internal Financial Controls with Reference to Financial
3. Our responsibilty is to express an opinion on the internal financial controls with reference to financial
statements of the Holding Company, and its subsidiary company, as aforesaid, based on our audit. We
conducted our audit in accordance with the Standards on Auditing issued by the ICAI prescribed under
Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference
to financial statements, and the Guidance Note issued by the ICAI. Those Standards and the Guidance
Note require that we comply with ethical requirements and pian and perform the audit to obtain reasonable
assurance about whether adequate internal financial controls with reference to financial statements were
established and maintained and if such controls operated effectively in all material respects.
4, Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal
financial controls with reference to financial statements and their operating effectiveness. Our audit of
internal financial controls with reference to financial statements includes obtaining an understanding of
such internal financial controls, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error.
5. Webbelieve that the audit evidence we have obtained and the audit evidence obtained by the other auditors
in terms of their reports referred to in the Other Matter paragraph below, is sufficient and appropriate to
provide a basis for our audit opinion on the internal financial controls with reference to financial statements
of the Holding Company, and its subsidiary companies, as aforesaid.
Meaning of Internal Financial Controls with Reference to Financial Statements
6. Accompany's internal financial controls with reference to financial statements is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. A
‘company's intemal financial controls with reference to financial statements include those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
Teflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance
at transactions are recorded as necessary to permit preparation of financial statements in accordance
generally accepted accounting principles, and that receipts and expenditures of the company are
@\j made only in accordance with authorisations of management and directors of the company; and (3) Walker Chandiok &Co LLP
provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use,
or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with Reference to Financial Statements
7. Because of the inherent limitations of internal financial controls with reference to financial statements,
including the possibilty of collusion or improper management override of controls, material misstatements
due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal
financial controls with reference to financial statements to future periods are subject to the risk that the
internal financial controls with reference to financial statements may become inadequate because of
‘changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
8. In our opinion the Holding Company and its subsidiary company which is a company covered under the
Act, have in all material respects, adequate internal financial controls with reference to financial
statements and such controls were operating effectively as at 31 March 2020, based on the internal control
over financial reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note issued by the ICA\.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
ark
Siddharth Talwar
Partner
Membership No: 512752
UDIN: 20512752AAAAFAG636|
Place: Faridabad
Date: 29 December 2020 ‘SONA LW PRECISION FORGINGS LIMITED
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Senay Ness SONA BLW PRECISION FORGINGS LIMITED.
Summary of significant accounting policies and other explanatory information for the year ended
31March 2020
1. Group overview
Sona BIW Precision Forgings limited (the “Parent Company”), a public limited company was incorporated on 27
October 1995 and began commercial production in November 1998. ‘The Group engaged in the manufacturing of
precision forged bevel gears, differential case assemblies, conventional and micro-hybrid starter motors, EV traction
‘motors et, for automotive and other applications.
2. Group Companies
Consolidated financial statements comprise the Financial statements of Sona BLW Holding Limited, its subsidiaries
(the parcat company and subsidiary companies together referred to as ‘Group and its associate which are listed
below (hereinafter referred as the "Group):
Proportion of | Proportion of
Name of Subsidiary Country of | ownership (%) as | ownership (%) as
incorporation | at 31] at 3
March 2020, March 2019
Son Wolding BN’ Amsterdam, — The | Netherland
Netherlands aa ae
Sona Autocomp USA TUG USA Ni 100%
‘Sona Autocomp Germany GmaBH ‘Geemany Nil 100%
PIII Beteligangs GmbH & Co. KG ‘Gesmany Nil 949%
SONA BIW Driveline LLC, Troy, Michigan | USA Ni 100%
SONA BLW.fife Gabi ‘Germany Ni 100%
‘SONA BLW Hungary Lad Hungary Nit 100%
SONA BLW Prazisionsschmiede GmbH Germany Ni 99.7%
Comstar Automotive “Technologies Pavate |. 100% Ni
Limited (Comstar India)
Comstar Automotive Technologies Seniees | a 100% Ni
Private Limited
Comstar Automotive USATIG USA 100% Ni
‘Comstar Hong Kong Mexico No.1, LLC | USA a Ni
ComstarAuromodve Hong Kong Lid 10% Ni
(Comstax Hong Kong) Hong Kong
fomestel Automotive Technologies Mexicana 10% Ni
os logis Hong Kong
Comstar Automotive (Hangzhou) Co,Lzd | China 10% Ni
Comeneryia Automotive Technologies | 4exicg ae Nt
Mexicana, 8. DE RL. DE CV (Dormant)
Comestel Auromosive Technologies Mexicana, 100% Nil
S.DERLDECY, Mexico
Proporion of | Proportion of
[Name of Associate Country of | ownership (6) as | ownership (%) a5
incorporation | at 31] ae an
March 2020, March 2019
Sona Skill Development Centre Lid. India Nil Nil SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information for the year ended
31 March 2020
(A) Significant accounting polices
“This note provides a list of the significant accounting policies adopted in the preparation of these consolidated
financial statements, These policies have been consistently applied to all the years presented, unless otherwise stated
a) Basis of preparation
3) Statement of compliance
“The Consolidated financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules,
2015} and other relevant provisions of the Act.
“The Consolidated financial statements were adopted by the Group's Board of Directors on 29 December 2020.
4) Historical cost convention
‘The Consolidated financial statements have been prepared on a historical cost bass, except for the Following:
‘© certain financial assets and lables that is measured at fac value; and
‘© defined benefit plans ~ plan assets measured at fair value
b) Basis of consolidation
“The Group's consolidated financial statements which include the accounts of Sona BIW Precision Forgings Limited
and all significant subsidiaies, which are directly or indirectly controled by the parent company. Control is achieved
‘where parent company possesset more than half of the voting rights of a company or has in another way the power to
‘govern the financial and operating policies of an entity so a8 to obtain benefits from its activites. In assessing control,
‘potential voting rights that presendly are exercisable or convertible are taken into account. The financial statements of
subsidiaries are included in the consolidated financial statements from the date that control commences until the date
that control ceases. On acquisition, the identifiable assets, abilities and contingent liabilities of a subsidiary are
measured at thir fit values atthe date of acquisition.
All significant intercompany transactions and balances between Group entities ae eliminated on consolidation.
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair
value ofthe identifiable assets, liabilities and contingent liabilities of a subsidiary at the date of acquisition. Goodwil is,
recognized as an asset and is tested for impairment annually, or on such other occasions that events or changes in
circumstances indicate that it might be impaired.
©) Propeny, plant and equipment
Freehold land is carted at cost All other items of property, plant and equipment are stated at historical cost less
depreciation. Histotcal cost includes expenditure that is dteedy attibutable to the acquisition of the items. The
present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the
‘espective asset if the recognition criteria fora provision are met.
Subsequent costs ate included in the asers carying amount of recognised as a separate asset, as appropriate, only
‘when it is probable tha future economic benefits associated with the item will flow to the Group and the cost of the
jtem can be measured reliably. The casrying amount of any component accounted for as a separate asset is de
recognised when replaced, All other epaits and maintenance are charged to profit or loss during the teporing pesiod
in which they ae incurted.
“The cost of an item of property plant & equipment is the cach price equivalent atthe recognition date. If payment is
deferred beyond normal credit terms, the PP&E is capitalized at discounted value. The difference between the
fiscounted valve and the total payment is recogeized as interest over the period of credit. SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information for the year ended
31 March 2020
Depreciation on property, plant and equipment is provided on the stright-line method, computed on the basis of
useful ives (s set out below) as prescribed in Schedule TT of the Act
“Asset category ‘Useful life (in years)
Factory Buildings 30
Roads 10
Sheds 3
Plant and e 7 15
Furniture and fixures 10
TT equi ‘
‘Computers 3
Vehicles +
‘Office equipment $
Teasehold land 7195
Leaschold ‘Over the effective tem of ease
Jn.case of subsidiaries he following useful lives have been used by the Group:
‘Asset category ‘Useful life (in years)
Balldings TO to 50 year
‘Buildings and land improvernents 15 to 25 years
“Technical machinery and equipment 8 1025 years
‘Other equipment, Factory and office equipment 3 to 10 years
"The asses? residual values and useful lives are reviewed and adjusted if appropriate at the end of each reporting
period
‘Where, during any financial year, any addition has been made to any asset, ot where any asset has been sold, discarded,
demolished of destrayed, or significant components replaced; depreciation on such assets isealeulated on a pro rata
basis as individual assets with specific useful life from the month of such addition or, as the case may be, up to the
‘month on which such asset has been sold, discarded, demolished or destroyed or replaced.
De-recognition
‘An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal of
‘when no future economic benefits are expected from its use ot disposal. Any gan or loss arising on de-recognition of
the asset (alolated as the difference between the net disposal proceeds and the carrying amount of the asset) is,
included inthe income statement when the asset is derecognised.
4) Intangible assets
Totangjble assets acquired separately are measured on initial recognition at cost. Following. intial recognition,
intangible assets are cated at cost less accumulated amortization and accumulated impairment losses, if any. Cost
‘comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended
[Expendiare on the research phase of projects is recognised as an expense as incurred.
‘Costs that are directly attributable to a projets development phase are recognised as intangible assets, provided the
Group can demonstrate the following
+ the technical feasibility of completing the intangible aset so chat it wil be available for use.
+ its intention to complete the intangible asset and use or slit.
+ its ability to se or sel the intangible asset
“how the intangible asst will generate probable future economic benefits,
1 the avalabity of adequate technica, financial and other resources to complete the development and to use or sll SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information for the year ended
31 Mare 2020,
+ its ability to measure eeliably the expenditure atuibutable ro the intangible asset during its development.
Development costs not meeting these criteria for capitalisation are expensed as incurred
Subsequent expenditure is capitalised only when it inereases the future economic benefits embodied in the specific
asset to which it elas.
Amontisation methods and periods,
TThe amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at
least at the end ofeach reporting period. Changes in the expected useful life or the expected pattern of consumption,
‘of future economic benefits embodied in the aset is accounted for by changing the amortization period or method, 25
appropriate and are treated as changes in accounting estimates. ‘The amortization expense on intangible assets with
finite lives is ecognised inthe Statement of Profit and Loss.
Asset class Useful life (in years)
‘Computer software 6
“Technical know-how 6
Brand Indefinite
‘In-caseof subsidiaries the following useful lives have been used by the Group:
Intangible assets with finite useful lives are capitalized at cost and amortized on a straight-line basis generally over a
period of 3 to 15 years, depending on their estimated useful lives. Usefl lives are examined on an annual basis and
adjusted when applicable on a prospective basis.
Intangible assets Customer relationships and patents
Customer relationships and Patents acquired in a business combination are recogeized at fue value atthe acquisition
date. Customer relationships and Patents have a finite useful life and are carried out at cost less accumulated
amortization. Amortization is calculated using the straight-line method to allocate the cost of Customer relationships
and patents over their estimated usefl lives of 15 years (customer telationships) and of 15 years (patents).
¢) Impairment of non-financial assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, ot more frequently if events oF changes in circumstances indicate that they might be impaired
‘Other assets at tested for impairment whenever events or changes in circumstances indicate that the carrying amount
‘may not be recoverable. At each reporting date, the Group assesses whether there is any indication based on
inteanal/extesnal factors, that an asset may be impaired. If any such indication exists, the Group estimates the
recoverable amount of the asset, An impairment lost is recognised for the amount by which the asset’s carving
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’ fair value less costs of
