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Notes to Accounts of Sanghi Industries Ltd.

Mar 31, 2016

Note 1. Contingent Liabilities and Commitments

The claims against the company not acknowledged as debt amount to Rs, 130.75 Cr. (Previous year Rs, 151.94 Cr.) and interest and penalty thereon as may be decided at the time of disposal of the claim. Against above, the Company has deposited a sum of Rs, 50.64 Cr. (Previous Yfear Rs, 52.95 Cr.) with respective authorities as deposit.

Note 2. Deferred Tax (Assets) / Liabilities

For recognition of Deferred Tax Asset (DTA) where the Company has unabsorbed depreciation under Income Tax Act, 1961: the virtual certainty of realization of such assets is prescribed as a criteria in AS 22. For the current year, the Company has not recognized such DTA in the accounts on prudent basis.

The Company is in the business of manufacturing and sale of cement and clinker which is considered to constitute one single primary segment. The secondary segment based on geographical segmentation are considered to be business outside India and within India.

Domestic revenue includes Rs, 0.25 crore self consumption (Previous Year Rs, 0.36 crore)

Note 3. related Party Disclosure as per Accounting Standard 18:

a. Key Management Personnel:

Mr. Ravi Sanghi - Chairman and Managing Director

Mr. Aditya Sanghi - Whole Time Director Mr. Alok Sanghi - Whole Time Director

Mrs. Bina Engineer - Whole Time Director Mr. N. B. Gohil - Whole Time Director

b. Subsidiary, Joint Venture and Associates:

The Company has incorporated subsidiary Company in China named, Sange Testing Services (Shanghai) Co., Ltd. on March 20, 2015. However, no investment is made till March 31, 2016.

c. Enterprises over which persons described in (a) above are able to exercise significant influence

1. Sanghi Infrastructure Ltd.

2. Kachchh Steels Pvt. Ltd.

Note 4. Additional information pursuant to the provisions of Schedule III to the Companies Act, 2013 is as under:

Note 5. In conformity to the Companies Act 2013, the Company has changed its Accounting year to 31st March and hence, the current financial year ended on 31st March 2016 is for the period of 9 months and not comparable with those of the previous year.


Jun 30, 2015

1. ABOUT THE COMPANY

Sanghi Industries Limited was incorporated in 1985 and is engaged in the manufacturing and marketing of cement and cement products in domestic and export market. The Company's manufacturing facilities are at Sanghipuram, Gujarat. Equity shares of the Company are listed on The National Stock Exchange and Bombay Stock Exchange.

2. Terms / Rights attached to equity shares

The Company has only one class of equity shares having a par value of ' 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Terms of redemption of Redeemable Preference Shares

Preference Shares are redeemable in stepped up quarterly instalments from June 2011 to June 2018.

4. Details of shares alloted as fully paid up pursuant to contract(s) without payment being received in cash, bonus shares and shares bought back during immediately preceding five years. - NIL

5. Corporate Social Responsibility Expenses

a) Gross amount required to be spent by the Company during the year is Rs.1.13 cr. based on average net profit of last three years as per Section 198 of the Companies Act, 2013.

b) Amount spent during the year in cash on purposes other than construction / acquisition of any asset is Rs. 1.70 cr.

6. Contingent Liabilities and Commitments

The claims against the company not acknowledged as debt amount to Rs.151.94 cr. (Previous year Rs.139.35 cr.) and interest and penalty thereon as may be decided at the time of disposal of the claim. Against above, the Company has deposited a sum of Rs.52.95 cr. (Previous Year Rs.46.26 cr.) with respective authorities as deposit.

Rs. In crore)

As at As at 30.06.2015 30.06.2014

Excise & Service Tax 104.58 80.78

Customs 12.41 12.41

Sales Tax 1.76 1.76

Debt Recovery Tribunal - 11.21

Claims of Gujarat Water Supply and Sewerage Board 26.38 26.38

Land Revenue Tax 1.17 1.17

Electricity Duty 3.30 3.30

Other Claims against the Company 2.34 2.34

Total 151.94 139.35

hEstimated amount of contracts remaining to be executed on capital account and not provided for is '4.46 cr. Net of advances (Previous year '53.77 cr.)

7. Deferred Tax (Assets) / Liabilities

For recognition of Deferred Tax Asset (DTA) where the Company has unabsorbed depreciation under Income Tax Act, 1961, the virtual certainty of realization of such assets is prescribed as a criteria in AS 22. For the current year, the Company has not recognized such DTA in the accounts on prudent basis.

8. Segment Reporting

The Company is in the business of manufacturing and sale of cement and clinker which is considered to constitute one single primary segment. The Secondary segment based on geographical segmentation are considered to be Business Outside India and within India.

9. Related Party Disclosure as per Accounting Standard 18:

a. Key Management Personnel:

Mr. Ravi Sanghi - Chairman and Managing Director

Mr. Aditya Sanghi - Whole Time Director

Mr. Alok Sanghi - Whole Time Director

Mrs. Bina Engineer - Whole Time Director

Mr. N. B. Gohil - Whole Time Director

b. Subsidiary, Joint Venture and Associates:

The Company has incorporated subsidiary Company in China named, Sange Testing Services (Shanghai) Co., Ltd. on March 20, 2015. However, no investment is made till June 30, 2015.

10. Other expenses include NIL pertaining to prior period expenses (Previous year '0.17 crore).

11. Power and Fuel consumption include exchange loss of '0.82 crores. (Previous year Rs.2.96 crore)

12. Additional information pursuant to the provisions of Schedule V to the Companies Act, 2013 is as under:

13. As per the Mines and Minerals (Development and Regulations) Amendment Act, 2015, the Company is required, in addition to royalty, pay to the District Mineral Foundation of the district in which the mining operations are carried out, an amount not exceeding the royalty paid, in such a manner and subject to the categorization of the mining leases and the amounts payable by the various categories of lease holders, as may be prescribed by the Central Government.

The Company is also required to pay a sum equivalent to two percent of the royalty to the National Mineral Exploration Trust as per the requirement of the Mines and Minerals (Development and Regulations) Amendment Act, 2015.

As on the balance sheet date, contribution required to be made to District Mineral Foundation is not determined and rules for National Mineral Exploration trust are yet to be notified, hence no provision is made during the year ended June 30, 2015.

14. The previous year's figures have been regrouped/reclassified wherever necessary to conform with current year's classification.


Jun 30, 2013

Note : 1 (a) : ABOUT THE COMPANY

Sanghi Industries Limited is engaged in the manufacturing and marketing of cement and cement products in domestic and export market. The Company’s manufacturing facilities are at Sanghipuram'' Gujarat. Equity shares of the Company are listed on The National Stock Exchange and Bombay Stock Exchange.

NOTE 2 For recognition of Deferred Tax Asset (DTA) where the Company has unabsorbed depreciation under Income Tax Act'' 1961; the virtual certainty of realisation of such assets is prescribed as a criteria in AS 22. For the current year'' the Company has not recognized such DTA in the accounts on prudent basis.

NOTE 3 RELATED PARTY DISCLOSURE:

a. Key Management Personnel:

i. Mr. Ravi Sanghi – Chairman and Managing Director ii. Mr. Aditya Sanghi – Whole Time Director iii. Mr. Alok Sanghi – Whole Time Director iv. Mrs. Bina Engineer – Whole Time Director v. Mr. N.B. Gohil – Whole Time Director

NOTE 4 Other Expenses include Rs.2.01 Crore pertaining to prior period expenses (Previous year NIL).

NOTE 5 Additional information pursuant to the provisions of paragraph 3'' 4C and 4D of Part (II) of Schedule VI to the Companies Act'' 1956 is as under (Certified by the management):

Note 6 The previous year’s figures have been regrouped/reclassified wherever necessary to conform with current year’s classification.

7. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions'' actual results could differ from these estimates. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

8. The accounts are prepared on historical cost convention and in compliance with the Generally Accepted Accounting Principles in India and in all material respect with the Accounting Standards notified under The Companies Accounting Standards Rule 2006 and the relevant provision of The Companies Act'' 1956.


Jun 30, 2012

A) Disclosure of Sundry Creditors under Current Liabilities is based on the information provided by the supplier regarding their status as defined under the "Micro, Small and Medium Enterprises Development Act, 2006". Amount overdue as on 30th June 20I2 to Micro, Small and Medium Enterprises on account of principal amount together with interest, aggregate to Rs. Nil (previous year Rs. Nil).

b) No provision for Income Tax is made in the current period in view of the computation of income resulting in loss as per the normal computation as per provision of the Income Tax Act for AY 20I2-I3. MAT Credit Entitlement for the current period Rs. Nil (PY. Rs. 3.I0 crores) . The Deferred Tax Liability and Deferred Tax Assets as on 30.06.20I2 computed as per AS 22 is as under:

c) Related Party Disclosure :

a. Key Management Personnel:

i. Mr. Ravi Sanghi - Chairman and Managing Director

ii. Mr. Aditya Sanghi - Whole Time Director

iii. Mr. Alok Sanghi - Whole Time Director

iv. Mrs. Bina Engineer - Whole Time Director

v. Mr. N.B. Gohil - Whole Time Director

b. Particulars of remuneration paid to Chairman and Managing Director and Whole time Directors are given in Para 4 of the Report on Corporate Governance.

c. As informed, there are no subsidiaries or associate companies.

d) The claims against the company not acknowledged as debt amount to Rs. 118.14 crore (Previous year Rs. 126.35 crore) and interest and penalty thereon as may be decided at the time of disposal of the claim. Against above, the Company has deposited a sum of Rs. 49.11 crore (Previous Year- Rs. 54.24 crore) with respective authorities as deposit.

e) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 0.82 crore (net of advances) (Previous year Nil)

f) Foreign currency exposure that are not hedged by derivative instruments or otherwise as on 30th June, 20I2 amount to Rs. 2II.39 crore ( Previous Year Rs. 202.75 crore )

g) The previous year's figures have been regrouped/reclassified wherever necessary to conform to current year's classification. However, previous year's figures are for I5 months and therefore, are not comparable.

h) Additional information pursuant to the provisions of paragraph 3, 4C and 4D of Part (II) of Schedule VI to the Companies Act, I956 is as under (Certified by the management):


Mar 31, 2010

1. Secured Loans

a) The Term Loan from IDBI, Dena Bank, Bank of Rajasthan Ltd., Lakshmi Vilas Bank Limited, India Debt Management Pvt. Ltd., Deutsche Investment India Pvt. Ltd., Goldman Sachs (India) Finance Pvt. Ltd. and Power Finance Corporation Ltd., are secured by a registered mortgage of the present and future fixed assets except Thermal Power Plant of the Company.

b) The Foreign Currency Loan from FMO, Netherlands is secured by the mortgage of thermal power plant.

c) The working capital facility from Bank of India is secured by a charge on the Current Assets.

d) The aforesaid Loans, in addition to the security are guaranteed by the Promoter Directors in their personal capacity.

2. Inventory of Raw Materials, Consumables, Stores, Packing Material and Work-in-Progress, are valued at weighted average cost basis, certified by the management. Finished goods and semi finished goods are valued at lower of cost (inclusive of excise duty, if paid) and net realizable value.

3. Depreciation on Fixed Assets has been provided as per schedule XIV to the Companies Act, 1956. The Company has worked all the three shifts during the Year and it is a continuous process plant and the depreciation has been provided accordingly.

4. The production facilities of Polymers Division have been leased to M/s. Sanghi Polymers Pvt. Ltd. (SPPL) with effect from 1st April, 2003 till the process of hiving off of Polymer division is completed with necessary approvals. The lessee has also taken over the obligation of the servicing of the debt secured by the said assets. The lease rent of Rs.12 lacs p.a. is charged as such the same is not considered as a separate segment. Since the actual transfer of assets are pending, instead of SPPL, ICICI Bank and State Bank of Hyderabad have filed a claim against SIL in Debt Recovery Tribunal at Mumbai and Hyderabad for the recovery of their Principal dues of Rs.2.68 crs. and Rs.11.21 crs. respectively and interest thereon as may be decided. These amounts have been included as Contingent Liabilities in Note No. 12 (d)

5. The debtors, creditors and loans and advances balances are subject to confirmation and adjustments, if any.

6. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small, and Medium Enterprises Development Act, 2006". Amount overdue as on 31st March, 2010 to Micro, Small, and Medium Enterprises on account of principal amount together with interest, aggregate to Rs. Nil (previous year Rs. Nil). The auditors have relied on the same.

7. (i) Income Tax : No provision for Income Tax is made in the current year in view of the computation of income resulting in loss as per the provision of the Income Tax Act, however, there is book profit as envisaged in section 115 JB of the Income Tax Act and Tax thereon has been provided.

(ii) MAT credit Entitlement includes Rs.34.02 crores pertaining to earlier years.

(iii) Deferred Tax:

Deferred Tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date, unlike MAT rate at which it was considered till March 2009.

8. Related Party Disclosure:

a. Key Management Personnel:

Mr. Ravi Sanghi - Managing Director Mr. Aditya Sanghi – Whole Time Director Mr. Alok Sanghi - Whole Time Director Mrs. Bina Engineer – Whole Time Director

b. Particulars of remuneration paid to Managing Director and Whole time Directors are given in note No. 14 of this schedule.

c. As informed, there are no subsidiaries or associate companies.

9. The Company had certain derivative transactions with a Bank in 2008-09. These were terminated by the Bank and a claim of USD 37 million was raised on the Company. The matter was under Arbitration at London Court of International Arbitration. Prior to any decision at LCIA, the bank has paid compensation of Rs.5.8 crore to the Company and withdrawn its claim, which is reflected in Schedule "9".

10. a. Provisions involve substantial degree of estimation in measurement and recognized where there is present obligation as a result of the past events and it is probable that there will be an outflow of resources.

b. Contingent liabilities are not recognized but disclosed in notes.

c. Contingent assets are neither recognized nor disclosed in financial statements

d. The claims against the Company not acknowledged as debt amount to Rs.74.83 crore (Previous year Rs.73.41 crore) and interest and penalty thereon as may be decided at the time of disposal of the claim. Against above, the Company has deposited a sum of Rs.42.41 crore (Previous Year- Rs.40.65 crore) with respective authorities as deposit.

e. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.2.16 crore ( Previous year Rs.6.67 crore)

11. Details of Directors Remuneration

a. The Managing Director has waived his remuneration and commission for the current financial year.

12. Foreign currency exposure that are not hedged by derivative instruments or otherwise as on 31st March 2010 amount to Rs.186.46 crore (Previous Year Rs.217.34 crore)

13. Previous years figures have been regrouped/reclassified wherever necessary.

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