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Notes to Accounts of Sanghvi Forging & Engineering Ltd.

Mar 31, 2015

Corporate Information:

Sanghvi Forging & Engineering Limited (SFEL) is an ISO 9001:2008 Certified Indian Company engaged in the manufacturer of open and closed die forging products for the oil & gas, defence, ship building, power & other sectors. It also exports products to various foreign countries over the last two decades.

The Company has set up additional 15000 MTPA Heavy Forging Division in recent years (with single piece forging up to 40 MT) to manufacture proof machined products viz. stepped shafts, bars & hollows, blocks, flanged shafts, gear blanks, shells, tube sheets, forging items etc at GIDC Industrial Estate at plot no. 1401, 1402 & 1403, Waghodia Dist: Vadodara.

1. Contingent Liabilities

A. Disputed Liabilities

(Rs. in '000) As at Asat March 31, 2015 March 31, 2014

* Income Tax on Accounts of Disallowance 6,132.80 2,061.15

* Penalty on Account of Disallowances of Expenses 503.64 571.00

* Service Tax on Account of Cenvat Credit 2,738.52 1,856.16

* Central Sales Tax Demand on Account of 'C' Form 2,789.15 1,902.23

Impact of pending litigation

Future cash flows in respect of the above, if any, is determinable only on receipt of judgments/decisions pending with

relevant authorities. The company does not expect the outcome of matters stated above to have a material adverse effect on the Company's financial conditions, result of operation or cashflow.

2. Related Party Details

(a) Related Party Disclosure

Key Management Personnel Mr. Babulal S. Sanghvi Mr. Jayanti B. Sanghvi Mr. Naresh B. Sanghvi Mr. Vikram B. Sanghvi

Relative of Key Management Personnel Smt. Bhamridevi B. Sanghvi Smt. Meena J. Sanghvi Smt. Kiran N. Sanghvi Smt. Sheetal V. Sanghvi Mr. Mahesh B Sanghvi

Enterprises under Significant Influence of Babulal Sanghvi (HUF) Key Management Personnel or their Relatives Jayanti Sanghvi (HUF) Naresh Sanghvi (HUF) Vikram Sanghvi (HUF) Gautam Stainless Pvt. Ltd. Subsidiary Company Sanghvi Europe B V

3. The Company has entered into lease agreements for certain properties including director's accommodation which are cancellable at the option of the Company or as per agreed terms. The total rent charged to the Statement of Profit and Loss for the year towards such leases amount to 907.63 thousands (P.Y. 896.58 thousands).

4. Segment disclosures:

(a) Business Segment:

The company has only one reportable business segment of Forging & Fitting as the primary reportable Business segment for disclosure. The business segments are business of Forging & Fitting and wind energy business.

(b) Geographical Segment:

The company has exported during the year and it does require disclosure as a separate reportable segment of Domestic Sales and Export Sale

5. Terms and Conditions of Unsecured Loan: Interest free loan.

6. Previous financial year's figures have been regrouped wherever necessary to make them comparable with those of the current year.


Mar 31, 2014

1. Related Party Details

(a) Related Party Disclosure

Key Management Personnel

Shri. Babulal S. Sanghvi

Shri. Jayanti B. Sanghvi

Shri. Naresh B. Sanghvi

Shri. Vikram B. Sanghvi

Relative of Key Management Personnel

Smt. Bhamridevi B. Sanghvi ( Wife of Director & Mother of Directors)

Smt. Meena J. Sanghvi ( Wife of Director)

Smt. Kiran N. Sanghvi ( Wife of Director)

Smt. Sheetal V. Sanghvi (Wife of Director)

Shri. Mahesh B Sanghvi (Son of Director & Brother of Directors)

Enterprises under Significant Influence of Key Management Personnel or their Relatives

Babulal Sanghvi (HUF)

Jayanti Sanghvi (HUF)

Naresh Sanghvi (HUF)

Vikram Sanghvi (HUF)

M/s Gautam Pipeline Product ( Prop: Babulal Sanghvi (HUF))

M/s Gautam Stainless Pvt. Ltd.

2. Contributions are made to Recognised Provident Fund/ Government Provident Fund which covers all employees. While both the employees and the Company make predetermined contributions to the Provident Fund .The contributions are normally based on a certain proportion of the employee''s salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to Rs. 1343.55 Thousands (Previous Year Rs. 1,265.54 Thousands).

In respect of Gratuity, Contributions are made to LIC''s Recognised Group Gratuity Fund Scheme based on amount demanded by LIC of India. Provision for Gratuity is based on actuarial valuation done by independent actuary as at the year end. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. After the issuance of the Accounting Standard 15 on ''Employee Benefits'', commitments are actuarially determined using the ''Projected Unit Credit'' method. Gains and losses on changes in actuarial assumptions are accounted for in the Profit and Loss account.

Category of Plan Assets :The Company''s Plan Assets in respect of Gratuity are funded through the Group Scheme of the LIC of India.

The actuarial calculations used to estimate commitments and expenses in respect of gratuity and compensated absences are based on the following assumptions which if changed, would affect the commitment''s size, funding

3. The Company has entered into agreements in the nature of lease / leave and license agreement with different lessors / licensors for the purpose of establishment of office premises/Residential Accommodations. These are generally in nature of operating lease / leave and license, disclosure required as per Accounting Standard 19 with regard to the above is as under

4. Segment disclosures:

(a) Business Segment:

The company has only one reportable business segment of Forging & Fitting as the primary reportable Business segment for disclosure. The business segments are business of Forging & Fitting and wind energy business.

(b) Geographical Segment:

The company has exported during the year and it does require disclosure as a separate reportable segment of Domestic Sales and Export Sale

Note on restructuring :

Banks have restructured repayment of installment and converted part of WC into WCTL. The salient feature of the sanction includes:

a Sanction of Fresh - Term Loan Rs. 18 crore

a Sanction of Fresh - Working Capital Term Loan Rs. 19.50 crore

* Extended Moratorium on principal of existing term loans upto August - 2015.

5. Terms and Conditions of Unsecured Loan:

(a) Interest free loan, Repayable after 3 years

6. Previous financial year''s figures have been regrouped wherever necessary to make them comparable with those of the current year.


Mar 31, 2013

Corporate Information:

Sanghvi Forging & Engineering Limited (SFEL) is the manufacturer of various forging and machined components for Process & Heavy

Industrial application.

The Company has set up additional 15000 MTPA Heavy Forging Division (with single piece forging up to 40 MT) to manufacture proof machined products viz. stepped shafts, bars & hollows, blocks, flanged shafts, gear blanks, shells, tube sheets, forging items etc at GIDC Industrial Estate(at plot no. 1401, 1402 & 1403), Waghodia Dist: Vadodara.

1. Contributions are made to Recognised Provident Fund/ Government Provident Fund which covers all employees. While both the employees and the Company make predetermined contributions to the Provident Fund .The contributions are normally based on a certain proportion of the employee''s salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to Rs.1265.54 Thousands (Previous Year Rs.903.16 Thousands).

In respect of Gratuity, Contributions are made to LIC''s Recognised Group Gratuity Fund Scheme based on amount demanded by LIC of India. Provision for Gratuity is based on actuarial valuation done by independent actuary as at the year end. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. After the issuance of the Accounting Standard 15 on ''Employee Benefits'', commitments are actuarially determined using the ''Projected Unit Credit'' method. Gains and losses on changes in actuarial assumptions are accounted for in the Profit and Loss account.

2. Segment disclosures:

(a) Business Segment:

The company has only one reportable business segment of Forging & Fitting as the primary reportable Business segment for disclosure. The business segments are business of Forging & Fitting and wind energy business.

(b) Geographical Segment: The company has exported during the year and it does require disclosure as a separate reportable segment of Domestic Sales and Export Sale.

3. Terms and Conditions of Unsecured Loan:

(a) Repayable after 3 years

(b) Interest Charged at the rate of 0 to 12%.

4. Previous financial year''s figures have been regrouped wherever necessary to make them comparable with those of the current year.


Mar 31, 2012

Corporate Information:

Sanghvi Forging & Engineering Limited (SFEL) is the manufacturer of various forging and machined components for Process & Heavy Industrial application.

The Company is setting up 15000 MTPA open die forging unit (with single piece forging up to 40 MT) to manufacture proof machined products viz. stepped shafts, bars & hollows, blocks, flanged shafts, gear blanks, shells, tube sheets, forging items etc at GIDC Industrial Estate (at plot no. 1401, 1402 & 1403), Waghodia Dist: Vadodara.

1. SHARE CAPITAL

(b) Right to vote, dividend and restriction attached to each class of issued capital to be disclosed.

All the Shareholders whose name is entered in the Registered of Members of the Company shall enjoy the same voting rights and be subject to the same liabilities as all other shareholder of the same class.

2) Contingent Liabilities:- (Rs. in '000)

As at As at Particulars March 31, 2012 March 31, 2011

Guarantee Given By Bankers on Behalf of Company

- Bank Guarantee 70776.192 28142.26

- Letter of Credit 502759.42 6514.24

Disputed Liabilities

- Income Tax on Accounts of Disallowance 1825.62 856.62

- Excise Duty on Account of Cenvat Credit 776.34 776.34

- Service Tax on Account of Cenvat Credit 1261.50 1037.24

- Service Tax on Account of Import of Services 0.00 16.07

3) Segment disclosures:

(a) Business Segment:

The Company has identified "Forgings and Fittings" as the only primary reportable business Segment.

4) Repayment of Unsecured Loan:

(i) Repayable after 3 Years

(ii) Interest charged at the rate of NIL, 12%.

5) Previous financial year's figures have been regrouped wherever necessary to make them comparable with those of the current year.

6) During the year company has closed its 100% subsidiary-Sanghvi Middle East FZE. The loss on closure of the business is recognised in the profit & loss during the year.

 
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