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Notes to Accounts of Sanghvi Movers Ltd.

Mar 31, 2014

Particulars For the year ended 31st March 2014 31st March 2013 1. Contingent liabilities and commitments Contingent liabilities

(a) Claims against the Company not acknowledged as debts 82.17 104.30

(b) Bills receivable discounted — 279.22

(c) Sales tax matters (refer note ''i'' below) 707.06 125.00

(d) Income tax matters* 258.94 535.90

(e) Service tax matters* 261.20 — excluding consequent penalties, if any

Commitments

Estimated amount of contracts 29.40 86.11 remaining to be executed on capital and not provided for (net of advances)

1,338.77 1,130.53

i) Includes demand notice of Rs. 363.94 lakh (2013: Rs. Nil) towards VAT and Rs. 218.37 lakh (2013: Rs. Nil) for interest aggregating to Rs. 582.31 lakh (2013: Rs. Nil) received from Deputy Commissioner of Sales Tax under Maharashtra Value Added Tax Act, 2002 for the year 2009-10 and Rs. 124.75 (2013: Rs. 124.75) from Joint Commissioner of Sales Tax under Gujarat Value Added Tax Act, 2003 for the year 2008-09 regarding transfer of right to use the goods. The Company is in process of contesting the demand in appeal under Maharashtra Value Added Tax Act, 2002 and has contested the demand in appeal under the Gujarat Value Added Tax Act, 2003.

2. Related party disclosures

a) Individuals exercising significant influence over the company

1 Mr. Chandrakant Sanghvi

b) Key management personnel

1 Mr. Chandrakant Sanghvi

2 Mr. Ramchandra Desai (upto 1 November 2012)

3 Mr. Sham D. Kajale

c) Relatives of Individuals exercising significant influence over the company

1 Mrs. Mina C. Sanghvi - Spouse of Mr. Chandrakant Sanghvi

2 Mr. Rishi Sanghvi - Son of Mr. Chandrakant Sanghvi

3 Ms. Niyoshi Sanghvi - Daughter of Mr. Chandrakant Sanghvi

4 Ms. Ruchi Sanghvi - Daughter of Mr. Chandrakant Sanghvi

5 Mr. Anilkumar Sanghvi - Brother of Mr. Chandrakant Sanghvi

d) Relatives of key management personnel

1 Mrs. Tanuja Desai - Spouse of Ramchandra Desai (upto 1 November 2012)

e) Enterprises over which key management personnel exercise significant influence

1 Jethi Builders and Traders Private Limited

2 Sanghvi Erectors Private Limited

3 Maharashtra Erectors Private Limited

* As gratuity and compensated absences are computed for all the employees in aggregate, the amounts relating to the Key Managerial Personnel cannot be individually identified. However, contribution toward superannuation fund is included as part of managerial remuneration.

** Mr. Chandrakant P. Sanghvi has given personal guarantee up to Rs. 3,500 Lakhs (2013 : Rs. 3,500 Lakhs) and has pledged his 6 lakh (2013 : 6 Lakhs) equity shares towards the loan for which no guarantee commission is paid by the Company.

$ Includes Rs. 79.83 Lakhs (Previous Year Rs. Nil) of managerial remuneration which is subject to the approval of shareholders and Central Government.

# Includes Rs. 15.72 Lakhs (Previous Year Rs. Nil) managerial remuneration subject to the approval of shareholders.

31. Disclosure as per Accounting Standard 15 ( Revised) : Employee Benefits

The following table sets out the status of the Gratuity plan as required under Accounting Standard 15 (Revised)

Note:The estimates of future salary increases take into account inflation, seniority, promotion and other relevant factors on long term basis.

3. Deferral/capitalisation of exchange differences

On 29 December 2011, the Ministry of Corporate Affairs (''MCA'') has issued an amendment to Accounting Standard 11- The Effects of changes in Foreign Exchange Rates and clarification provided vide circular 25/2012 dated 09 August 2012. The amendment permits Companies to defer/capitalise the exchange differences arising on Long Term Foreign Currency Monetary Items.

In accordance with the amendment, the Company has capitalised exchange differences arising on long term foreign currency loans, amounting to Rs. 3,229.02 (2013: Rs. 684.32) to the cost of plant and equipments. There is no exchange loss deferred in ''Foreign Currency Monetary Translation Difference Account'', as there are no other long term foreign currency monetary items.

4. Foreign currency exposures outstanding at the year end

(a) The Company has hedged its foreign currency risk exposure and the forward cover outstanding as at the Balance Sheet date:

5. Segment reporting

The Company is primarily engaged in the business of providing cranes on rental basis. Further all the commercial operations of the Company are based in India. Accordingly, there is no separate reportable segment in accordance with AS 17- Segment Reporting prescribed under the Companies (Accounting Standards) Rules, 2006.


Mar 31, 2013

1. Background

Sanghvi Movers Limited ("SML" or "the Company") was incorporated in 1989. SML is engaged in the business of providing hydraulic and crawler cranes to various industries in the infrastructure sector and has a fleet of 387 medium-to large-size hydraulic trucks mounted telescopic and lattice boom cranes and crawler cranes with lifting capacity ranging from 20 tons to 800 tons. The Company has its corporate office at Pune. The equity shares of the Company are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

2. Related party disclosures

a) Enterprises exercising significant influence over the company

1 Maharashtra Erectors Private Limited (upto 09 September 2011)

b) Individuals exercising significant influence over the company

1 Mr. Chandrakant Sanghvi

c) Key management personnel

1 Mr. Chandrakant Sanghvi

2 Mr. Ramchandra Desai (upto 1 November 2012)

3 Mr. Sham Kajale

d) Relatives of individuals exercising significant influence over the company

1 Mrs. Mina Sanghvi - Spouse of Mr. Chandrakant Sanghvi

2 Mr. Rishi Sanghvi - Son of Mr. Chandrakant Sanghvi

3 Ms. Niyoshi Sanghvi - Daughter of Mr. Chandrakant Sanghvi

4 Ms. Ruchi Sanghvi - Daughter of Mr. Chandrakant Sanghvi

5 Mr. Anilkumar Sanghvi - Brother of Mr. Chandrakant Sanghvi

e) Relatives of key management personnel exercising significant influence over the Company

1 Mrs. Tanuja Desai - Spouse of Ramchandra Desai (upto 1 November 2012)

f) Enterprises over which key management personnel exercise significant influence

1 Jethi Builders and Traders Private Limited

2 Sanghvi Erectors Private Limited

3 Maharashtra Erectors Private Limited

3. Deferral/capitalisation of exchange differences

On 29 December 2011, the Ministry of Corporate Affairs (''MCA'') has issued an amendment to Accounting Standard 11- The Effects of changes in Foreign Exchange Rates and clarification provided vide circular 25/2012 dated 09 August 2012. The amendment permits Companies to defer/capitalise the exchange differences arising on Long Term Foreign Currency Monetary Items.

In accordance with the amendment, the Company has capitalised exchange differences arising on long term foreign currency loans, amounting to Rs.684.32 (2012: Rs.1,230.01) to the cost of plant and equipments. There is no exchange loss deferred in ''Foreign Currency Monetary Translation Difference Account'', as there are no other long term foreign currency monetary items.

4. Foreign currency exposures outstanding at the year end

(a) The Company has hedged its foreign currency risk exposure and the forward cover outstanding as at the Balance Sheet date:

(b) The following foreign currency receivables/payables balances are not covered by derivative instruments at the Balance Sheet date:

5. Segment reporting

The company is primarily engaged in the business of providing cranes on rental basis. Further all the commercial operations of the company are based in India. Accordingly, there is no separate reportable segment in accordance with AS 17- Segment Reporting prescribed under the Companies (Accounting Standards) Rules, 2006.

6. During the previous year, the company had corrected its accounting practice of recognising certain borrowing costs as cost of fixed assets resulting in the interest expense being higher by Rs. Nil (2012 : Rs.678.66) and consequently depreciation charge being lower by Rs. Nil (2012 : Rs.199.29) for the year with consequent profit before tax being lower by Rs. Nil (2012 : Rs.479.37) on account of the prior period item.

7. Prior period comparatives

Previous years'' comparative figures have been regrouped/reclassified wherever necessary to conform to current year''s presentation.


Mar 31, 2012

1. Background

Sanghvi Movers Limited ("SML" or "the Company") was incorporated in 1989. SML is engaged in the business of providing hydraulic and crawler cranes to various industries in the infrastructure sector and has a fleet of 400 medium to large size hydraulic trucks mounted telescopic and lattice boom cranes and crawler cranes with lifting capacity ranging from 20 tons to 800 tons. The Company has its corporate office at Pune. The equity shares of the Company are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

2.1 Rights, Preferences and Restrictions Attached to Equity Shares

The Company has only one class of shares referred to as equity shares having a par value of Rs. 2. 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 ensuing Annual General Meeting. The Board of Directors, in their meeting held on 30th May 2012 proposed a final dividend of Rs. 3 per equity share. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting . In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their share holding.

a) Term loans from banks in Indian Rupees carry interest rate ranging from 10% to 13.5% p.a. The number of monthly installments payable for these loans are 54 to 96.

b) Foreign Currency term loans from banks carry usance interest or interest rate ranging from 6 months to 1 year LIBOR or EURIBOR plus additional basis points ranging from 120 to 350. These loans are repayable in 360 to 720 days from the date when these loans were availed.

Security

a) Term loans amounting to Rs. 59,527.93 (2011 : Rs. 52,444.73) are secured against cranes/trailers.

b) Term loans amounting to Rs. 3,508.22 (2011 : Rs. 2,229.26) are secured against cranes/trailers and equitable mortgage on land and buildings at Tathawade and Bharuch.

c) Term loans amounting to Rs. 424.77 (2011 : Rs. 731.82) are secured against mortgage on land and buildings at Tathawade and Bharuch.

d) Term loans amounting to Rs. 2,219.51 (2011 : Rs. 4,120.01) are secured against cranes/trailers and personal guarantees given by Chairman and Managing Director, Mr. Chandrakant Sanghvi.

e) Term loans amounting to Rs. 72.24 (2011 : Rs. 56.03) are secured against vehicles purchased out of the term loan.

f) Also refer note 16.

a) Working Capital loans from banks representing cash credit facilities are secured against receivables, personal guarantee of Mr. Chandrakant Sanghvi, Chairman and the Managing Director up to Rs. 3,700, pledge of 5 lacs equity shares of the Company held by Mr. Chandrakant Sanghvi, Chairman and the Managing Director and 1 lac equity shares held by Mrs. Mina Sanghvi. The cash credit facilities are repayable on demand and carry an interest ranging between 12-14% p.a.

b) Loans and Advances from a related party are repayable on demand and carry an interest rate ranging from 12-14 % p.a.

The Company was levied additional custom duty amounting to Rs. 140.59 in the year 1998 on import of certain cranes. The Company had capitalised this amount in the year of procurement of these cranes and had also filed an appeal against the levy of this additional customs duty. Those cranes were subsequently sold in earlier years. In the current year the appeal was decided in favour of the Company and it received a refund.

3. Related Party Disclosures

a) Enterprises Exercising Significant Influence over the Company

1 Maharashtra Erectors Private Limited (upto 09 September 2011)

b) Individuals Exercising Significant Influence over the Company

1 Chandrakant Sanghvi

c) Key Management Personnel

1 Chandrakant Sanghvi

2 Ramchandra Desai

3 Sham Kajale

d) Relatives of Individuals Exercising Significant Influence over the Company

1 Mina Sanghvi - Spouse of Chandrakant Sanghvi

2 Rishi Sanghvi - Son of Chandrakant Sanghvi

3 Niyoshi Sanghvi - Daughter of Chandrakant Sanghvi

4 Ruchi Sanghvi - Daughter of Chandrakant Sanghvi

5 Anilkumar Sanghvi - Brother of Chandrakant Sanghvi

e) Relatives of Key Management Personnel Exercising Significant Influence over the Company

1 Tanuja Desai - Spouse of Ramchandra Desai

f) Enterprises over which Key Management Personnel Exercise Significant Influence

1 Jethi Builders and Traders Private Limited

2 Sanghvi Erectors Private Limited

3 Maharashtra Erectors Private Limited

* As gratuity and compensated absences are computed for all the employees in aggregate, the amounts relating to the Key Managerial Personnel cannot be individually identified.

** Chandrakant Sanghvi has given personal guarantee up to Rs. 59.45 crores and has pledged his 5 lacs equity shares towards the loan for which no guarantee commission is paid by the Company.

** Mina Sanghvi has pledged her 1 lac equity shares towards a loan for which no guarantee commission is paid by the Company.

4. Deferral/Capitalisation of Exchange Differences

On 29 December 2011, the Ministry of Corporate Affairs ('MCA') has issued an amendment to Accounting Standard 11- The Effects of changes in Foreign Exchange Rates. The amendment permits Companies to defer/capitalise the exchange differences arising on Long Term Foreign Currency Monetary Items.

In accordance with the amendment, the Company has capitalised exchange differences arising on long term foreign currency loans, amounting to Rs. 1,230.01 (2011: 83.44) to the cost of plant and equipments. There is no exchange loss deferred in 'Foreign Currency Monetary Translation Difference Account', as there are no other long term foreign currency monetary items.

5. Segment Reporting

The Company is primaraly engaged in the business of providing cranes on rental basis. Further all the commercial operations of the Company are based in India. Accordingly, there is no separate reportable segment in accordance with AS 17- Segment Reporting prescribed under the Companies (Accounting Standards) Rules, 2006.

6. During the year, the Company corrected its accounting practice of recognising certain borrowing costs as cost of fixed assets resulting in the interest expense being higher by Rs. 678.66 (2011 : Nil) and consequently depreciation charge being lower by Rs. 199.29 (2011 : Nil) for the year with consequent profit before tax being lower by Rs. 479.37 (2011 : Nil) on account of the prior period item.

7. Prior Period Comparatives

The financial statements for the year ended 31 March 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31 March 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.

8. The prior year financial statements have been audited by a firm of Chartered Accountants other than B S R & Co.

 
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