annual report 2015-16 - bombay stock exchange · capacities and growing market presence, we have...

Building a SuStainableFuture

AnnuAl RepoRt 2015-16

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about us 02

Message from the Chairman 04

Financial Highlights 2015-16 06

Our Journey 07

Our Core Competencies 08

Corporate information 09

Management Discussion and analysis 10

board’s report 15

Corporate Governance report 37

Standalone Financial Statements 54

Consolidated Financial Statements 84

aCrOSS tHe pages

DisclaimerWe have exercised utmost care in the preparation of this report. it contains forecasts and/or information relating to forecasts. Forecasts are based on facts, expectations, and/or past figures. as with all forward-looking statements, forecasts are connected with known and unknown uncertainties, which may mean the actual results may deviate significantly from the forecast. Forecasts prepared by the third parties, or data or evaluations used by third parties and mentioned in this communication, may be inappropriate, incomplete, or falsified. We cannot assess whether information in this report has been taken from third parties, or these provide the basis of our own evaluations, such use is made known in this report. as a result of the above-mentioned circumstances, we can provide no warranty regarding the correctness, completeness, and up-to-date nature of information taken, and declared as being taken, from third parties, as well as for forward-looking statements, irrespective of whether these are derived from third parties or ourselves. readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

We are BUILDINGa sustainable future

We’ve maximised our know-how, multiplied our capabilities and diversified our expertise. All in the bid to stand on a ground of consistent performance and excellent results.

And now that we are here, our ambitions are striving towards something bigger and a lot more enduring. We are going ahead to meet the demands of the future and create a concrete place for ourselves in that arena. We are striding ahead to bring about a powerful era of economic surge for India.

But most of all, we are moving ahead to build a truly sustainable future for ourselves and the Indian industrial fraternity.

Our vision yesterday was to create a rock solid today.

Hence, we have worked our way towards an enduring foundation.

About us

Started in 1989, Sanghvi Forging is among the country’s leading manufacturer of forging products for industrial applications. With an installed capacity of 18,600 TPA, across two plants, we can manufacture a single-piece forging of upto 40 MT.

Our plants are certified for ISO 9001:2008, ISO 14001: 2004 and OHSAS 18001:2007. Our products are also certified by TUV, Germany, for Pressure Equipments Directive. Our product basket consists of forgings of diverse nature like tube forgings, forged bars, shafts and rings

Having demonstrated our product capabilities and qualities for domestic clients, we now have a strong presence in the international markets for some of the marquee players. With expanding capacities and growing market presence, we have worked towards achieving high business sustainability.

OUr VISIOnTo be a pioneer and leading supplier in Forging Industry by providing one-stop solution for forged products and be the preferred product development partner with our customers.

To be focused on high quality through quest for perfection and innovative approach to maintain leadership position in business.

OUr VAlUESWe must constantly strive to achieve the highest possible standards in day-to-day work and in the quality of goods we provide.

We must work cohesively with our colleagues across the company and are honest and straight forward to all stakeholders.

We accept personal accountability to meet our business needs, improve our systems and help others improve their effectiveness.

We believe that people work best when there is a foundation of trust.

We have a compelling desire to lead the change and win in the market place.

ProducTs PorTfolio

Forged Flanges Closed Die Forgings Heavy Forgings Machined Components

Sanghvi Forging & Engineering Ltd.2

indusTries & APPlicATion

POWEr SEcTOr Shafts rings rotors couplings Polar Wheels Hydro Shafts Pelton runners

DEFEncE canisters Gun Barrels rocket Shells Armor

Plates Breach Blocks Forged plates

SHIP BUIlDInG Flanges Drive Shafts nuts & Bolts rudder Shafts Propeller Shafts

OIl & GAS BOPs Shells Flanges Drill collars Tube Sheets Valve Bodies casing Spools

Statutory Reports Financial Statements

3annual report 2015-16

Corporate Overview

Mr. Babulal s. sanghvi chairman

MessAge froM thechAirMAn

T he year 2015 was another year marked with volatility and uncertainty in economic growth

- both at global and domestic level. Falling crude oil prices, the resurgence of US economy and geopolitical unrest in the Middle East resulted in global economy growing by a modest 3.1%. The emerging economies continued to face challenges on account of investments. With the rebound of crude oil prices, and Brexit issue, we expect the global economy to sustain its growth levels.

India continued to show its strength by clocking the fastest economic growth in the world with a GDP of 7.6% in 2015-16. The improvement in India’s economic fundamentals has accelerated in the year 2015 with the combined impact of strong government reforms, rBI’s inflation focus supported by benign global commodity prices. Despite uncertainties in global market, there was visible increased confidence among the foreign direct investment. With a slew of major economic reforms taking shape, it is expected that the economy will further grow in the coming year.

Your company has prepared the foundation to achieve the next-level of growth. Since our new capacities that have been completed since 2013 and enhanced operational efficiencies, we expect to capitalise on the next-wave of growth opportunities. The economic reforms are expected to bring in benefits to the core sectors with significant investments. Our transition from a small forging player to heavy forgings products augurs well for us to capitalise on the future growth opportunities. It was our proactive approach to pump in investments during slowdown, which we expect to reap benefits as the economy slowly bounces back. With our growing presence and acceptance of our

DEAr SHArEHOlDErS,


H69.30 crTotal revenue in 2015-16

29.33%Y-o-Y increase in share of exports from total revenue

14.62%Y-o-Y increase in EBIDTA

products among multiple sectors, we are fast gaining foothold in domestic as well international forging markets.

The year 2015-16 saw commercialisation of our new capacities and execution of the order book, we reported a positive PBDT during the year. On a standalone basis, total revenue stood at R 69.30 crore, supported by a 29.33% growth in exports. EBITDA margins grew by 14.62%. The market demand continued to be weak, with low capacity utilisation levels. With expected reforms and new investments across country’s core infrastructure sectors, we expect our order book to further strengthen and improve our profitability levels.

During the year under review, we further strengthened our global presence. Understanding the importance of quality, our products continued to be certified and trusted by some of the leading global vendors. regular audits and intense quality checks have allowed us to ensure uncompromised quality levels for our products.

The ‘Make in India’ momentum continues to gain traction in the eyes of global investors and manufacturers. India was ranked the highest globally in terms of consumer confidence during October-December quarter of 2015, continuing its earlier trend of being ranked the highest during first three quarters of 2015, as per the global consumer confidence index created by nielsen. This validates the country’s growing prominence as a preferred destination for future investments for various products and services.

This change in attitude comes at an right time. With china now slowly transitioning towards a consumer-driven economy, the world looks upon India as the next cost-efficient and qualitative manufacturing base.

Since our inception we have always believed in sustainability. Even during downside of the economy, we knew our investments in capacity expansion was the need of the hour. We believed in our capabilities and core competencies to take the company to

greater heights of success. Our state-of-the-art technologies, new product development and growing market presence will only help us reinstate our leadership.

Driven by our passionate team of managers and employees, we believe we stand at a threshold of exciting times ahead. On behalf of the entire team at Sanghvi, we thank the investors and shareholders for the continued support. We reiterate our conviction that the very reason for our existence is to create economic, social, and environmental value for our stakeholders—including our employees, our consumers, our shareholders, our bankers and the enterprises and institutions within our society—now and into the future.

India continued to show its strength by clocking

the fastest economic growth in the world with a

GDP of 7.6% in 2015-16..

Annual Report 2015-16

Corporate Overview Statutory Reports Financial Statements

5

finAnciAl highlights,2015-16

6930

8738

5426

46095152

rEVEnUE (H in lacs)

2011-12 2012-13 2013-14 2014-15 2015-16

1993

1541

1025

772

1035

ExPOrTS (H in lacs)

2011-12 2012-13 2013-14 2014-15 2015-16

1467

1625

618682689

EBIDTA (H in lacs)

2011-12 2012-13 2013-14 2014-15 2015-16

14891389

132912691269

EqUITY SHArE cAPITAl (H in lacs)

2011-12 2012-13 2013-14 2014-15 2015-16


our JourneY

1989Set-up factory at Vadodara with an installed capacity of 300 MTPA for close die forgings

1996Obtained first major approval from the Technical Development committee of India

2005Enhancement of closed die forging installed capacity upto 1,200 MTPA

2006Establishment of new open die forging plant with an installed capacity of 2,400 MTPA

2008Implementation of SAP-Enterprise resource planning

2009Obtained approval from GE , PDIl and EIl

2011IPO and listing on BSE and nSE

2013commencement of new heavy forging division with the total installed capacity of 18600 MTPA

2015commissioned India’s largest capacity: Polymer quenching Tank

2016Developed critical forgings for strategic applications.



7

our corecoMPeTencies

GrEEn EnErGY We have a captive green power generation of 0.350 MW. This has not only helped us sustain our energy requirements, but also helps us contribute to keeping a clean-green environment. We have installed a root/reed based STP plant for waste water treatment in our new Plant.

MAkE In InDIAOur focus on Import substitution for strategic sectors and export of high value forgings made in India.

cErTIFIcATIOnS AnD APPrOVAlSSuccessful in receiving major domestic and international certifications from reputed clients, this reflects our commitments and expertise in the industry.

SEcTOrAl ExPAnSIOnExpanded market from Oil & Gas and Petrochemical sectors into Power Generation, Defence and Ship Building.

ScAlEWe are one of the largest open die forging companies in India with a total capacity of 18,600 MTPA

TEcHnOlOGYThe company has invested more than H150 crore in last five years in state-of-the-art technology, with machineries from Germany and Italy.

MArqUEE clIEnTSWith products of high-quality our client profile includes Siemens, GE, VOITH, HP, BP, BHEl, GnFc, EIl, Essar, Godrej,IFFcO, BHPV, IOcl, MDl, kirloskar, reliance, linde, ISrO, nPcIl and l&T among others.

GlOBAl PrESEncEWe generate around 30% of revenues from exports, reducing our dependence on the Indian geography. Today, we are present in more than 20 countries across the globe.




9

Corporate Information

Board of DirectorsShri Babulal S. Sanghvi(Chairman & Wholetime Director)

Shri Jayantilal B. Sanghvi(Managing Director)

Shri Naresh B. Sanghvi(Wholetime Director)

Shri Vikram B. Sanghvi(Wholetime Director & Chief Financial Officer)

Shri Ram S. Kaushal(Independent Director)

Shri Shantaram Yarlagadda(Independent Director)

Shri Ram C. Prasad(Independent Director)

Shri Baba Pai(Independent Director)

Mrs. Aruna S. Khasgiwala(Independent Director)

Company SecretaryMr. Keval Thakkar

Statutory AuditorM/s Shah & Bhandari, Chartered Accountants

Internal AuditorM/s Parikh Mehta & Associates, Chartered Accountants

Secreterial AuditorM/s Samdani Shah & Associates

Registered Office244/6-7, G.I.D.C Industrial Estate,

Waghodia- 391760, Dist : Vadodara

Gujarat, India

Tel: 91-2668-673100

Fax: 91-2668-673135

Email : [email protected]

Web : www.sanghviforge.com

CIN : L28910GJ1989PLC012015

BankersState Bank of India

Bank of Baroda

Company’s R&T AgentBigshare Services Private Ltd

E-2/3, Ansa Industrial Estate, Sakivihar Road,

Mumbai - 400072

Corporate OfficeA-8, Parvati Chamber, Opposite Apsara Cinema,

Pratapnagar Road, Vadodara-390004

Gujarat, India

Ph: 0265-2580644/2581658

Fax: 0265-2581126

Works OfficeUnit 1: 244/6-7, G.I.D.C. Industrial Estate,

Waghodia, Dist : Vadodara -391760, Gujarat, India

Unit 2: 1401, 1402, 1403, G.I.D.C. Industrial

Estate, Waghodia, Dist : Vadodara -391760,

Gujarat, India


Management Discussion & Analysis

Indian economyIndia is well positioned to withstand near-term headwinds

and volatility in global financial markets due to reduced

external vulnerabilities, a strengthening domestic business

cycle, and a supportive policy environment. With reforms

gaining momentum in terms of execution, the growth is

expected to strengthen to 7.9% in FY 2017-18. Progress on

infrastructure improvements and government efforts to

boost investment are expected to offset the impact of any

tightening of borrowing conditions resulting from tighter

U.S. monetary policy. Such investment will also lift potential

growth over the medium term. Low international energy

prices and domestic energy reforms will ease energy costs

for Indian firms that tend to be energy intensive.

Global Forging IndustryGlobal forging market to exhibit a healthy CAGR of around

8% during the forecast period. Forging is an appropriate

substitution to the casting methodology as it ensures

greater efficiency, reliability, and precision. Custom forging

accounts for the largest segment. In North America, this

segment achieves sales figures worth $6 billion annually.

Some of the major end-users of the forging industry

include automotive, aerospace and defense, agriculture,

construction, mining, general industrial equipment, and

material handling equipment.

It is expected that the aerospace and aviation industry is

one of the top end-users in the forging market, as forged

components are featured heavily to create commercial

and Defence aircrafts. In the coming years, there will be

an increase in the demand for materials with high-level

strength-to-weight ratios. Most of the forged components

used by the industry now are for bulkheads, wheels, beams,

brake carriers, and hinges.

Although not as highly affected as other industrial sectors,

the forging market has seen changes as a result of the

instability regarding the price of oil and gas. Despite the

oversupply in many OPEC nations, rehabilitation of gas

treatment plants and power plants still are very much

continuing, especially in the Middle East. Experts predict

that the global crude prices will improve by mid-year.

Indian forging sectorThe forging sector continues to be an integral component

of the country’s manufacturing sector. With most of the

capital intensive and manufacturing sector requiring

forging components, the sector continues to ensure

sustained growth in coming years. The size of the domestic

forging industry stands at 37.7 lakh tonnes per annum,

with several recognised players.

Forging Production in India is likely to grow at CAGR 9.5



11

percent for the period of 2015-18 and to reach to 29.7 Lakh

MT in 2017-18 as against 22.5 Lakh MT during year 2014-15.

Over Medium and long term growth in the forging industry

will be higher than the automotive industry growth and

make in India initiative will lead to have positive impact on

industry producing equipment for defense, aerospace and

railway sectors.

Government of India emphasis on defence, aerospace

equipment as a part of ‘Make in India’ campaign to

encourage manufacturing and attract foreign investment

has led many companies to seek licence to make defence &

aerospace equipment locally. This will open more business

opportunity for the domestic forging Industry.

The industry continues to address the growing demand

from global countries, as India continues to be the

preferred destination for global companies. High quality,

Engineering Expertise and competitive prices have resulted

in several companies outsourcing their forging needs to

India, resulting in significant exports in recent times.

Consumption marketThe lions share of the forging industry is by the automotive

sector, accounting currently for 61% of the industry

revenue, while remaining is by the non-automotive sector.

With upgradation of technology, the industry players

are now diversifying their market reach to sectors like

aerospace, energy, oil & gas, heavy engine parts, defence

construction equipment, power generation, power

transmission, transmission & distribution among others.

Make in India initiative The initiative has certainly given a boost to the country’s

manufacturing sector, with positive business sentiments.

A strategic marketing effort and initiate of Government,

has put the country on global map. India’s manufacturing

sector has evolved through several phases - from the initial

industrialization and the license raj to liberalization and the

current phase of global competitiveness.

With the expected reforms, the country is expected to

emerge as third-largest economy in the time to come.

Company OverviewSanghvi Forging and Engineering Limited is among the

leading players in heavy Forging and engineering products.

Headquartered in Vadodra, we are among the few players

to manufacture a wide-range of forging products.

Sectoral presence• Power

• Defence

• Oil & Gas

• Ship Building

• Machine Building

Business strategyWith our expanded capacity, we are at a capacity of 18,600

MTPA, we are one of the leading forging companies in

the country. Our operational excellence extends towards

producing products from a minimum of 1 Kg. to a maximum

of 40 MT - a range which gives us a unique competitive

advantage. Our expanded capacity backed by state-of-the-


art technology gives us a two-fold advantage; One, the

ability to produce products of most complex nature with

higher margins; Two, provides access to new clients across

the world, ensuring diversification across new business

sectors.

Your company is catering domestic as well as international

markets such as such as Indonesia, Italy, Malaysia, South

Korea, Canada, Germany, France, the Netherlands, Kuwait,

UAE, UK, Australia, USA etc.

The Company is having strong business relationship with

clients like Nuclear Power Corporation, BHEL, Godrej &

Boyce, L&T, Indira Gandhi Centre for Atomic Research

and Defence Research Development Organisation, PDIL

etc. and internationally, National Oilwell Varco, General

Electric, Voith, Andritz, Quality international, WEG etc. The

Company is expecting potential increase in demand of its

products from existing Clients. This will turn in to increase

its capacity utilization.

Growth in sectors i.e. Defense, Space, Oil and Gas, Power,

Heavy Engineering, Ship Building, will continue to rise. The

demands of our forging products both in domestic and

international markets will continue to grow and this will in

turn to aid to operate at high efficient level.

Opportunities & Threats The Government of India has outlined a fine print with

the ‘Make in India’ initiative, putting the focus back on the

manufacturing excellence in the country. In addition, the

proposed reforms have also provided the much needed

impetus to boost the sector. The proposed investments

in infrastructure, defence and energy sectors will further

lead to demand for our products. Our wide product range

strengthens our competency to address a diverse set of

clients, in domestic and global circuit.

While the optimism persists, there are certain threats

which continue to pose challenges in our growth trajectory.

Some of them being:

Currency volatility: Depreciating currency has been a

challenge in our business operations in recent times. While

it creates a comfort in exchange earnings with export

sales, it also puts forward the difficulty of increased cost

pressure and rising input costs.

Market uncertainty: Lack of application of reforms

does affect the future sustainability. However, with India

registering the highest ever quarter growth and emerging

as fastest growing nation in the world, there seems to

picking up growth in various manufacturing industry.

Rising costs: With volatility in raw material prices, there are

sustained challenges in regard to the rising inputs costs. In

addition, the rising power costs and unutilised capacities

add to the overall cost structure, impacting margins and

profitability in the long-run.

Operational reviewWe remained focused on strengthening the core of

our business through innovation, focusing on market

development and improvement of our operational

excellence. As the market conditions remained challenging,

our books of accounts did have an effect of the same.

The subdued demand, led to unutilised capacities, and

increased operational costs, which affected our margins

and profitability.

Competitive advantages • Quality: Our plants and manufacturing sites are

benchmarked with international quality and certifications.

This helps us to meet the demands of discerning global

clients.

• Product profile: We have the ability to produce a wide

range of complex engineering and forging products,

makes us a preferred vendor for some major domestic and

global manufacturing companies.

• Technology: We have invested more than H 150 crore

in last five years in setting up and modernising our

technology.

• Presence: We generate around 30% of revenues

from exports, reducing our dependence on the Indian

geography. Today, we are presenting more than 20

countries across the globe.

• Scale: We are one of the largest open die forging

companies in India with a total capacity of 18,600 MTPA


Annual Report 2015-16 13

OutlookWe expect to leverage our core strengths and drive towards building a sustainable future. Expanded capacities, niche

product profile and increasing market presence, our expected to push the Company to new scales of success.

Risk & Mitigation The Company considers good Corporate Governance as

pre-requisite for meeting the needs and aspiration of

shareholders and other stakeholders in the Company.

Aspart of the Company’s efforts to strengthen Corporate

Governance, the Board of Director has formulated

Risk Management policy, which puts in place Risk

Management structures with a clear definition of roles

and responsibilities, as well as risk portfolio involving a

continuous process of Risk identification, risk assessment,

control assessment and risk monitoring, review and

communication. The Company aims to:

• Identify, assess and manage existing as well as new risks

in a planned and coordinated manner.

• Increase the effectiveness of the Company’s internal and

external reporting structure.

• Develop and foster a “risk” culture within the organisation

that encourages all staff to identify risk and associated

opportunities and respond to them with appropriate

actions.

Internal Control Systems and their Adequacy The Company has appropriate internal control systems

andprocedures in place with regard to effective utilisation

of resources, efficiency in operation, financial reporting

and compliance with various rules and regulations. The

implementation of the SAP ECC 6.00 system in 2008 for

better control and reliability of the various businessand

processes was supplemented by extensive audits

conducted by the Statutory Auditors.

Key processes including production, planning and

accounting are done routinely through the globally

benchmarked SAP initiatives. Regular audits are conducted

to review the adequacy and effectiveness of the internal

controls and suggest improvement, if any, to strengthen

the existing system.

Discussion on Financial Performance with respect to Operational PerformanceYour company has reported total operational revenue of

H 6930.48 Lacs as compared to 8737.61 lacs in previous

year. And profit after tax stood to H (998.70) Lacs as against

H (794.70) Lacs in the previous year.

The result is due to the reason of overall slowdown in the

economy and global recession specifically in the oil and gas

sector from which greater portion of revenue of company

generated. We believe that our company is well-equipped

by required resources and backed by necessary expertise.

Being optimistic the resources and efforts will result in the

performance. It will improve the capacity utilization and

profitability.

Exports showing continue growth and it raised to

H 1992.91 lacs from H 1541.21 Lacs in the previous year.

We are also expanding our markets by entering into new

countries.

Development During the yearDuring the year your Company added to its box few more

approvals from leading Indian strategic and Defense sector

organization i.e. DRDO, SAIL, HEMRL,NPCIL, HAPP, MDL

etc. and also started forging of critical part and critical

material like Nickel alloys and copper alloys. The Company

has successfully executed orders requiring critical forging

having strategic applications.

Approvals Certifications

BHEL IBR ISO 9001-2008 TUV NORD

BVIS UHDE ISO 14001 – 2004 TUV NORD

TUV EIL BS OHSAS 18001 : 2007 TUV NORD

SGS ABS PED 97/23/EC TUV Rheinland

TOYO VELOSI

PDIL BEML

SAIL TBRL

HAPP FLOUR


Key Financial Indicators (Amt in H Lacs)

Developments in Human ResourcesThe Company’s strategy for innovative human resources

management is supporting business in a challenging

economic environment. Hiring strategically a talent who fit

to the company’s present condition and future goal is key

to ensure diverse and competency – driven workforce.

The company is having good working environment where

performance is rewarded; employees are respected

and opportunities are made available to release there

potentials in creating a performance oriented culture.

Number of initiatives by HR Department is carried out to

engage the employees into different activity other than

their routine job in the organization to create a family type

atmosphere in the company.

The Company has recruited talented professionals and

under their guidance exposure is being provided to the

young blood with an emphasis on training and development

with an aim of building a dynamic team. An investment has

been made to upgrade the facilities available to employees

to harmonious relations with employees. There were 249

people employed in the company as on March 31, 2016.

Financial Performance

Revenue Break-up % (Operational)

Revenue Break-up (Operational)

(H in lacs)

2015-2016 2014-2015

Total Revenue 6930.48 8737.61

EBITDA 1466.69 1625.47

Profit After Tax -998.70 -794.70

EPS -7.10 -5.85

2015-2016 2014-2015

Domestic 71 82

International 29 18

(H in lacs)

2015-2016 2014-2015

Domestic 4842.38 7172.02

International 1992.91 1541.21

Total Revenue

10000

8000

6000

4000

2000

2012 2013 2014 2015 20160

EBITDA

2000

1500

1000

500

2012 2013 2014 2015 20160


Annual Report 2015-16 15

Board’s Report

To

The members of

Sanghvi Forging & Engineering Limited

Your Directors take pleasure in presenting the 28th Annual Report of the Company along with the audited financial

statements for the year ended March 31, 2016 for your perusal, consideration and adoption.

Financial HighlightsThe financial performance for the fiscal 2016 is summarised in the following table

(H In Lacs)

Particulars Standalone

2015-16 2014-2015

Income from Operations 6686.23 8,604.44

Other Operating Income 149.07 108.79

Other Income 95.18 24.38

Total Income 6930.47 8,737.61

Operating & Administrative Expenses 5463.79 7,112.27

Operating Profit before Interest, Depreciation and Tax 1468.21 1,625.34

Interest and Financial Charges 1618.32 1,584.94

Depreciation and Amortisation 842.02 835.24

Profit Before Tax (993.66) (794.84)

Tax Expenses 5.05 (0.14)

Short Provisions for Taxes --

Profit After Tax (998.70) (794.70)

Financial and Operational PerformanceYour Company has achieved a turnover of H6835.30 Lac

and a net loss of H998.70 Lac for the financial year ended

March 31, 2016 as against a turnover H8713.23 Lac and net

loss of H794.70 respectively during the previous year.

Depreciation and amortization charge was increased from

H835.24 lac to H842.02 lac during the financial year 2015-16.

Interest charges were increased from H1584.93 lac to

H1618.32 lac during the financial year 2015-16.

Employee benefit expenses have increase from H499.20 lac

to H638.66 lac, making an increase of 27.94%. It signifies

that the Company has been constantly making efforts to

boost up its human resources and invested in bringing

experienced professionals in the organisation.

OutlookThe Company has taken a number of steps to sustain

its leadership position in the market and has been

strengthening its relationships with its customers. In

addition it is also making constant efforts to add new

customers and widen its customer base.

The combination of additional capacity of our new plant i.e.

15000 MTPA and integration has had a positive impact on

the Company’s operating margins. Your Company believes

to strengthen its topline and margins in the coming years.

We have received all approvals from different customers

that validate our product quality.

The Company continued its focus on strengthening local

manufacturing capabilities. However, it also analyzed

the trends in the steel industry and adapted to rapid


development occurring in the world of steel. The Company

has adopted strategic measures to minimize the adverse

macro-economic implications.

Share CapitalThe Company on January 25, 2016 allotted 10,00,000

Equity Shares of nominal value of H 10/- each at a price of

H 45.00/- per equity share, including premium of H 35.00/-

per equity share to Promoters of the Company against an

option attached to the Warrants to convert each warrant

into fully paid up Equity Share, exercised by them with

respect 10,00,000 Warrants allotted to them on October

10, 2014 on preferential basis in accordance with approval

of shareholders under Section 62(1)(c) of the Companies

Act, 2013 in the Extraordinary General Meeting held on

August 14, 2014.

Credit RatingYour company has managed to affirm the CARE D rating

for its long-term and short-term-bank facilities. There was

no further revision in the ratings signifies that company is

somehow managing things even if delay and cost overruns

in the new project. The Company expects to improve its

ratings in the coming year through capacity utilisation with

substantial marketing efforts.

Investors’ Relations and GrievancesAll the shareholders’/investors’ complaints/grievances

received during the financial year have been resolved and

there were no investor grievances pending, as on March

31, 2016. A confirmation to this effect has been obtained

from the Company’s Registrar and Share Transfer Agent

and authentication of the same can be verified from

the SCORES website at http://scores.gov.in. The details

regarding investor complaints received and resolved

during the year are mentioned in the report on Corporate

Governance annexed to this report.

Management Discussion and Analysis ReportA detailed review of operations, performance and future

outlook of the Company is covered under a separate Annexure

to this report as Management’s Discussion & Analysis.

DirectorsIn accordance with the provisions of the Companies Act,

2013, Shri Vikram B. Sanghvi, Director of the Company will

retire by rotation at the ensuing Annual General Meeting

and is eligible for re-appointment.

Dr. Aruna Khasgiwala appointed as additional director

of the Company at Board Meeting held on May 29, 2015

in accordance with the provisions of the Companies Act,

2013 and resignation of Mrs. Jyoti Meghani accepted in

the said Meeting of Board of Directors.

Key Managerial Personnel Shri Jayantilal B Sanghvi, Managing Director, Shri Vikram B.

Sanghvi, Whole time Director & CFO and Mr. Keval Thakkar,

Company Secretary are Key Managerial Personnel of the

Company.

During the year Shri Sagar Pandya resigned as Company

Secretary & Compliance officer with effect from October

30, 2015 and Shri Keval Thakkar was appointed as Company

Secretary & Compliance officer with effect from December

01, 2015.

Meeting of the BoardDuring the year from April 2015 to March 2016, 4 Board

Meetings were convened and held. The details of the Board

Meeting with regards to the Dates and attendance of each

Director thereat have been provided in the Corporate

Governance Report. The intervening gap between the

Meetings was within the period prescribed under the

Companies Act, 2013.

Amount Transferred To ReservesThe Board of Directors has not recommended transfer of

any amount of profit to reserve.

Declaration Given by Independent Directors The Independent Directors of the Company have given the

declarations to the Company that they meet the criteria

of independence as provided in Section 149(6) of the


Board EvaluationPursuant to the provisions of the Companies Act, 2013 and

SEBI ( Listing Obligations and Disclosure Requirements)

Regulations, 2015, the Board has carried out an annual

performance evaluation of its own performance, the

directors individually as well as the evaluation of the

working of its Audit, Nomination & Remuneration and

Compliance Committees.

Evaluation Criteria:

a. For Independent Directors :-

• Professional conduct

• Duties, Role, integrity and functions

• Knowledge and Skills

b. For Executive Directors :-

• Professional Conduct and Integrity

• Sharing of Information with the Board

• Key Performance in achievement of Goals

The Directors expressed their satisfaction with the

evaluation process.



17

Composition of Audit Committee Pursuant to the provision of Section 177 (8) of the Companies

Act, 2013, Audit Committee consists of All Independent

Directors as mentioned in below table. The Committee

interalia reviews the Internal Control System, Reports of

Internal Auditors and Compliance of various regulations. The

Committee also reviews at length the financial statements

before they are placed before the Board.

Composition of the Committee is as below:

Name Designation Category

Shri Ram

S Kaushal

Chairman Non-Executive and

Independent

Shri Baba Pai Member Non-Executive and

Independent

Shri Vikram B

Sanghvi

Member Executive and Non-

Independent

Shri Shantaram

Yarlagadda

Member Non-Executive and

Independent

Vigil Mechanism / Whistle BlowerIn staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Vigil Mechanism or ‘Whistle Blower Policy’ for directors, employees and other stakeholders to report genuine concerns has been established. The same is also uploaded on the website of the Company i.e.http://www.sanghviforge.com/pdf/whisler_blower_policy.pdf

Internal Financial ControlThe Company’s internal control procedure which includes internal financial controls, ensure compliance with various policies, ractices and statutes and keeping in view the organisation’s pace of growth and increasing complexity of operations. The internal auditor’s team carries out extensive audits throughout the year across all locations and across all functional areas and submits its reports to the Audit Committee of the Board of Directors.

Corporate Social ResponsibilityThe Company, having regard to its size and scope, is generally compliant with relevant guidelines on Corporate Social Responsibility (CSR), even though not presently applicable to the Company. The Board has also constituted a committee in accordance with Section 135 of the Companies Act 2013 to mentor and monitor CSR activities.

The call of fulfilling our CSR activities has sincerely been taken by us and we accord as much significance to CSR as any business project and the results are there for everyone to see. Dedicated need-based interventions have been initiated in areas where we operate. Enabling local people by fostering self-reliance is the motive behind our community development efforts.

Therefore, our interventions are structured around promoting education as well as informal education of Tribal Children, generating livelihood, empowering women and overall, social mobility.

Your Company is also constantly making efforts to maintain a greener planet and reduce its carbon footprint as much as possible. Through financial contributions and active participation of employees, your Company provides support to non-profit organisation that address community sustainability. Your Company contributed through donations, rain water harvesting sponsorship and by participating in various activities.

Policy on Nomination and RemunerationThe contents of Nomination and Remuneration Policy of

the Company prepared in accordance with the provisions

of Section178 of the Companies Act, 2013 and Regulation

19 of the SEBI(Listing Obligations and Disclosure

Requirements) Regulations,2015 are provided in the

Corporate Governance Report.

Related Party TransactionsAll related party transactions that were entered into during

the financial year were on an arm’s length basis and were

in the ordinary course of business. There are no materially

significant related party transactions made by the Company

with Promoters, Directors, Key Managerial Personnel or

other designated persons which may have a potential

conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit

Committee as also the Board for approval. Prior omnibus

approval of the Audit Committee is obtained during the

year for the transactions which are of a foreseen and

repetitive nature. The transactions entered into pursuant

to the omnibus approval so granted are audited and a

statement giving details of all related party transactions

is placed before the Audit Committee and the Board of

Directors for their approval. The Company has developed

a Related Party Transactions policy for purpose of

identification and monitoring of such transactions.

The policy on Related Party Transactions as approved by

the Board is uploaded on the Company’s website i.e. http://

www.sanghviforge.com/pdf/related_party_transaction.pdf


Report on Corporate GovernanceA separate Section on Corporate Governance is forming

part of the Annual Report and the Certificate from M/s

Samdani Shah and Associates, Company Secretaries,

Vadodara, the Company’s Secretarial Auditors confirming

the compliance of conditions on Corporate Governance

as stipulated under Clause 49 of Listing Agreement and

Schedule V of SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 is attached to the report

on corporate governance.

Fixed DepositsYour Directors report that the Company has not accepted

any deposits during the current financial year.

InsuranceYour Directors confirm that all the properties and insurable

interests of the Company, including buildings, plant and

machinery and stocks have been adequately insured.

Loan, Guarantee or InvestmentDetails of Loans, Guarantees and Investments covered

under the provisions of Section 186 of the Companies Act,

2013 are given in the notes to the Financial Statements.

Listing of Shares The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip code No. 533411 and on the National Stock Exchange of India Limited (NSE) with scrip code of SANGHVIFOR. The Company confirms that the annual listing fees to both the stock exchanges for the financial year 2016-17 have been paid.

Subsidiary CompanyCompany has its Wholly Owned Subsidiary Company in Netherlands in the name of “Sanghvi Europe BV”.

Statement containing salient features of the financial statement of subsidiaries/associate companies / joint ventures is attached in Form AOC-I in Separate Section of this Annual Report.

Familiarisation Programme for Independent DirectorsThe details of programmes for familiarization of Independent Directors and training with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company i.e.http://www.sanghviforge.com/pdf/familiarisation_program.pdf

AuditorsStatutory AuditorIn compliance with the Companies (Audit and Auditors) Rules, 2014, M/s. Shah & Bhandari, Chartered Accountants, Statutory Auditors who retires at the conclusion of the

ensuing Annual General Meeting and being eligible, offer themselves for appointment.

The Directors recommend the ratification and reappointment of M/s. Shah & Bhandari for the financial year 2016-17 and seek approval of Members.

Secretarial AuditorPursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Samdani Shah & Associates, Practicing Company Secretary, Vadodara, to undertake the Secretarial Audit of the Company for the FY 2016-17. The Report of the Secretarial Audit Report is annexed here with as “Annexure A”.There is no qualification in the Secretarial Report submitted by M/s. Samdani Shah & Associates to the Company.

Internal AuditorThe Board of Directors has appointed M/s Parikh Mehta & Associates, Chartered Accountants as Internal Auditors of the Company for the F.Y. 2016-17 Pursuant to the provisions of Section 138 of the Companies Act, 2013 and The Companies (Accounts) Rules, 2014.

Directors’ Responsibility StatementTo the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

(a) that in the preparation of the annual financial statement for the year ended March 31, 2016 the applicable accounting standards had been followed along with proper explanation relating to material departures, if any

(b) that the accounting policies to the financial statement have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2016 and of the profit and loss of the company on that date;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) that the annual financial statement on a going concern basis; and

(e) that the proper internal financial controls were in place and that the internal financial controls were adequate and were operating effectively.



19

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Human ResourcesMany initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

The Company’s HR processes such as hiring and on-boarding, fair transparent online performance evaluation and talent management process, state-of-the-art workmen development process, and market aligned policies have been seen as benchmark practices in the Industry.

Pursuant to The Sexual Harassment of Women at

Workplace (Prevention, Prohibition and Redressal) Act,

2013 notified on December 9, 2013, the Company has set

up a Committee to look into complaints under the said Act.

The Company has not received any complaints relating

to sexual harassment at work place from any woman

employee during the year.

Disclosure by Senior Management Personnel I.e. one level below the Board Including all HODsNone of the senior management personnel have undertaken

financial and commercial transactions with the Company,

where they have personal interest that would have a

potential conflict with the interest of the Company at large.

DisclosureYour Directors state that no disclosure or reporting is

required in respect of the following items as there were no

transactions on theseitems during the year under review:

No significant or material orders were passed by the

Regulators or Courts or Tribunals which impact the going

concern status and Company’s operations in future.

Material Changes and CommitmentsYour Directors are of the opinion that there are no material

changes and commitments affecting financial position

of the Company which have occurred between end of

financial year of the Company and the date of this report.

Extract of Annual ReturnThe details forming part of the extract of the Annual Return

in form MGT 9 is annexed herewith as “Annexure B”.

Conservation of EnergyThe Company has taken several steps towards conserving

energy through its ‘Sustainability’ initiatives, disclosed

separately in the Annual Report. The information on

Conservation of Energy as required under Section 134(3)

(m) of the Companies Act, 2013 read with Rule 8 of

the Companies (Accounts) Rules, 2014 is provided in

“Annexure D” of this Annual Report.

Safety, Health and EnvironmentThe Company has continuously exercised effective safety,

health and environment policies. Water and air pollution

control measures are successfully operated and industrial

trade effluents are used for gardening. The tree plantation

at the factory site is maintained properly and the same

shall be duly taken care of at our new plant.

Ratio of Remuneration of DirectorDisclosures pertaining to remuneration and other details as

required under Section 197(12) of the Act read with Rule

5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 is annexed herewith as

“Annexure C”.

DividendThe Directors of your Company express their inability to

recommend any dividend for the FY 2015-16 due to the

current financial situation of the Company. However your

Company is harbouring a positive outlook for the next fiscal

with good returns in terms of revenue and profitability.

Risk ManagementThe Constitution of Risk Management Committee is

not applicable the company however the company has

voluntarily constituted Risk management Committee to

monitor the risk and to take actions on deviations.

Acknowledgement

Your Directors express their sincere appreciation for

the wholehearted and continued support assistance

and cooperation extended by the shareholders banks,

suppliers, customers, employees, and all concerned

towards the Company during the year under review.

On the behalf of the Board of Directors

Place: Vadodara Babulal S Sanghvi Date : May 25, 2016 Chairman


Form MR-3Secretarial Audit Report

for the Financial Year ended 31st March, 2016

[Pursuant to section 204(1) of the Companies Act, 2013 and rule 9

of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

Annexure-A to Board’s Report

To,

The Members,

Sanghvi Forging and Engineering Limited244/6,7, GIDC Industrial Estate,

Waghodia, Vadodara - 391760, Gujarat.

We have conducted the Secretarial Audit of the compliance

of applicable statutory provisions and the adherence

to good corporate practices by Sanghvi Forging and Engineering Limited (hereinafter referred to as ‘the

company’). Secretarial Audit was conducted in a manner

that provided us a reasonable basis for evaluating the

corporate conducts/statutory compliances and expressing

our opinion thereon.

Based on our verification of the Company’s Books,

Papers, Minute Books, Forms and Returns filed and

other records maintained by the company and also the

information provided by the company, its officers, agents

and authorized representatives during the conduct of

Secretarial Audit, we hereby report that in our opinion,

the company has, during the audit period covering the

Financial Year ended on March 31, 2016, complied with

the statutory provisions listed hereunder and also that the

company has proper Board-Processes and Compliance-

Mechanism in place to the extent, in the manner and

subject to the reporting made hereinafter:

We have examined the Books, Papers, Minute Books,

Forms and Returns filed and other records maintained by

the Company for the Financial Year ended on March 31,

2016, according to the provisions of:

i. The Companies Act, 2013 (the Act) and the rules made

there under;

ii. The Securities Contracts (Regulation) Act, 1956 (SCRA)

and the rules made thereunder;

iii. The Depositories Act, 1996 and the Regulations and

Bye-laws framed there under;

iv. Foreign Exchange Management Act, 1999 and the

rules and regulations made there under to the

extent of Foreign Direct Investment, Overseas Direct

Investment and External Commercial Borrowings;

v. The following Regulations and Guidelines prescribed

under the Securities and Exchange Board of India Act,

1992 (SEBI Act):-

(a) The Securities and Exchange Board of India

(Substantial Acquisition of Shares and Takeovers)

Regulations, 2011;

(b) The Securities and Exchange Board of India

(Prohibition of Insider Trading) Regulations, 1992

and The Securities and Exchange Board of India

(Prohibition of Insider Trading) Regulations, 2015;

(c) The Securities and Exchange Board of India

(Registrars to an Issue and Share Transfer Agents)

Regulation, 1993 regarding the Companies Act

and dealing with client.

We further report that, there were no actions/events

in pursuance of the following regulations requiring

compliance thereof by the company during the period of

this report:-

(a) The Securities and Exchange Board of India (Issue and

Listing of Debt Securities) Regulations, 2008;

(b) The Securities and Exchange Board of India (Delisting

of Equity Shares) Regulations, 2009;

(c) The Securities and Exchange Board of India (Buyback

of Securities) Regulations, 1998;

(d) The Securities and Exchange Board of India (Issue of

Capital and Disclosure Requirements) Regulations, 2009;

(e) The Securities and Exchange Board of India (Share

Based Employee Benefits) Regulations, 2014;



21

We have also examined compliance with the applicable

clauses/regulations of the following:

(i) The company has generally complied with the Secretarial

Standards issued by The Institute of Company Secretaries

of India (applicable w.e.f 1st July, 2015);

(ii) The Listing Agreement entered into by the Company

with stock Exchanges and/or Securities Exchange

Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015;

During the period under review the Company has complied

with the provisions of the Act, Rules, Regulations,

Guidelines, Standards, etc. mentioned above.

We further report that the Board of directors of

the company is duly constituted with proper balance

of executive directors, non-executive directors and

independent directors. The changes in the composition of

the Board of Directors that took place during the period

under review were carried out in compliance with the

provisions of the Act.

Adequate notice is given to all the Directors to schedule

the Board Meetings, Agenda and detailed notes on Agenda

were sent at least seven days in advance and a system

exists for seeking and obtaining further information and

clarification on the Agenda items before the meeting and

for meaningful participation at the meeting.

As per the minutes of the meetings duly recorded and

signed by the Chairman, the decisions of the Board were

unanimous and no dissenting views have been recorded.

We further report that there are adequate systems and

processes in the company commensurate with the size

and operations of the company to monitor and ensure

compliance with all the applicable laws, rules, regulations

and guidelines.

We further report that during the audit period there were

no specific instances in pursuance of the above referred

laws, rules, regulations, guidelines, etc., having a major

bearing on the Company’s affairs.

Suresh Kumar KabraPartner

Samdani Shah & Asso.Company Secretaries

ACS # 9711, CP # 9927

Vadodara, 25th May, 2016

This Report is to be read with our letter of even date which

is annexed as Appendix A and forms an integral part of this

report.


Appendix A

Our report of event date is to be read along with this letter.

1. Maintenance of Secretarial records is the responsibility of the management of the company. Our responsibility is to

express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the

correctness of the contents of secretarial records. The verification was done on test basis to ensure that correct facts

are reflected in secretarial records. We believe that the processes and practices we followed, provide a reasonable

basis for our opinion.

3. Wherever required, we have obtained the management representation about the compliance of laws, rules and

regulations and happening of events etc.

4. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the

responsibility of the management. Our examination was limited to the verification of procedures on test basis.

5. The Secretarial Audit report is neither an assurance as to the future viability of the company nor the efficacy or

effectiveness with which the management has conducted the affairs of the company.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor the efficacy or

effectiveness with which the management has conducted the affairs of the company.



ACS # 9711, CP # 9927

Vadodara, 25th May, 2016

To,

The Members,

Sanghvi Forging and Engineering Limited244/6,7, GIDC Industrial Estate,

Waghodia, Vadodara - 391760, Gujarat.



23

Annexure-B to Board’s Report

FORM NO. MGT 9EXTRACT OF ANNUAL RETURN

as on financial year ended on 31.03.2016

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the

Company (Management & Administration) Rules, 2014.

I. Registration & other details:

i CIN L28910GJ1989PLC012015

ii Registration Date 16. 03. 1989

iii Name of the Company SANGHVI FORGING AND ENGINEERING LIMITED

iv Category/Sub-category of the Company COMPANY LIMITED BY SHARES

v Address of the Registered office

& contact details

244/6 & 7 GIDC ESTATE, WAGHODIA, 391760, DIST: VADODARA.

Contact No. :-02668-673100

vi Whether listed company Yes /No YES

vii Name, Address & contact details of the

Registrar & Transfer Agent, if any.

BIGSHARE SERVICES PVT. LTD. E/2-3, ANSA INDUSTRIAL ESTATE,

SAKIVIHAR ROAD, SAKI NAKA, ANDHERI (E), MUMBAI 400 072.

Contact No: 022-28470652

II. Principal Business Activities of the CompanyAll the business activities contributing 10% or more of the total turnover of the company shall be stated

SL No

Name & Description of main products/services

NIC Code of the Product /service

% to total turnover of the company

1 Forging, pressing, stamping and roll-

forming of metal; powder metallurgy

3440 99

III. Particulars of Holding , Subsidiary & Associate Companies

Sl No

Name & Address of the Company

CIN/GLN Holding/ Subsidiary/ Associate

% Of Shares Held

Applicable Section

1 SANGHVI EUROPE B.V.

LAGE DIJK 31-F, 5705 BX

HELMOND, THE NETHERLANDS.

8712423033771 SUBSIDIARY 100 2 (87)


IV. Shareholding Pattern (Equity Share capital Break up as % to total Equity) (i) Category-wise Shareholding

Category of Shareholders

No. of Shares held at the end of the year as on 31.03.2015


% change during the

yearDemat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

A. Promoters

(1) Indian

a) Individual/HUF 9083726 0 9083726 65.39 10088157 0 10088157 67.74 2.35

"b) Central Govt.or State Govt."

0 0 0 0 0 0 0 0 0

c) Bodies Corporates 0 0 0 0 0 0 0 0 0

d) Bank/FI 0 0 0 0 0 0 0 0 0

e) Any other 0 0 0 0 0 0 0 0 0

SUB TOTAL:(A) (1) 9083726 0 9083726 65.39 10088157 0 10088157 67.74 2.35

(2) Foreign

a) NRI- Individuals 0 0 0 0 0 0 0 0 0

b) Other Individuals 0 0 0 0 0 0 0 0 0

c) Bodies Corp. 0 0 0 0 0 0 0 0 0

d) Banks/FI 0 0 0 0 0 0 0 0 0

e) Any other… 0 0 0 0 0 0 0 0 0

SUB TOTAL (A) (2) 0 0 0 0 0 0 0 0 0

Total Shareholding of Promoter (A)= (A)(1)+(A)(2)

9083726 0 9083726 65.39 10088157 0 10088157 67.74 2.35

B. PUBLIC SHAREHOLDING

(1) Institutions

a) Mutual Funds 0 0 0 0 0 0 0 0 0

b) Banks/FI 0 0 0 0 0 0 0 0 0

C) Cenntral govt 0 0 0 0 0 0 0 0 0

d) State Govt. 0 0 0 0 0 0 0 0 0

e) Venture Capital Fund 0 0 0 0 0 0 0 0 0

f) Insurance Companies 0 0 0 0 0 0 0 0 0

g) FIIS 0 0 0 0 0 0 0 0 0

h) Foreign Venture Capital Funds

0 0 0 0 0 0 0 0 0

i) Others (specify) 0 0 0 0 0 0 0 0 0

SUB TOTAL (B)(1): 0 0 0 0 0 0 0 0 0

(2) Non Institutions

a) Bodies corporates

i) Indian 282500 0 282500 2.03 369071 0 369071 2.48 0.44

ii) Overseas 0 0 0 0 0 0

b) Individuals 0 0

i) Individual shareholders holding nominal share

capital upto H.2 lakhs

1914022 3 1914025 13.78 2236935 3 2236938 15.02 1.24

ii) Individuals shareholders holding nominal share capital in

excess of H 2 lakhs

1867288 0 1867288 13.44 1454888 0 1454888 9.77 (3.67)



25

Category of Shareholders



% change during the

yearDemat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

c) Others (specify) 0 0

i) Clearing Members 15459 0 15459 0.11 13147 0 13147 0.09 (0.02)

ii) Non Residents Individuals

29288 0 29288 0.21 30085 0 30085 0.20 (0.01)

iii) Ovearseas Body Corporate

0 699981 699981 5.04 0 699981 699981 4.70 (0.34)

SUB TOTAL (B)(2): 4108557 699984 4808541 34.61 4104126 699984 4804110 32.26 (2.35)

Total Public Shareholding (B)= (B)(1)+(B)(2)

4108557 699984 4808541 34.61 4104126 699984 4804110 32.26 (2.35)

C. Shares held by Custodian for GDRs & ADR

0 0 0 0 0 0 0 0 0

Grand Total (A+B+C) 13,192,283 699,984 13,892,267 100.00 14,192,283 699,984 14,892,267 100.00 0

(ii) Share Holding of Promoters

Sl No.

Shareholder's Name Shareholding at the end of the year as on 31.03.2015

Shareholding at the end of the year as on 31.03.2016

% change in share holding

during the year

NO of shares % of total shares of the

company

% of shares pledged/

encumbered to total

shares


company


encumbered to total

shares

1 Jayantilal Babulal Sanghvi 1675591 12.06 10.98 1925591 12.93 10.98 0.87

2 Naresh Babulal Sanghvi 1582931 11.39 10.13 1832931 12.31 10.13 0.91

3 Babulal Sagarmal Sanghvi 1464283 10.54 9.46 1714283 11.51 9.46 0.97

4 Vikram Babulal Sanghvi 1255682 9.04 7.96 1505682 10.11 7.96 1.07

5 Sanghvi Bharmridevi Babulal

686634 4.94 0.00 686634 4.61 0.00 -0.33

6 Sanghvi Meena Jayantilal 629300 4.53 0.00 629300 4.23 0.00 -0.30

7 Sanghvi Kiran Naresh 576000 4.15 0.00 577250 3.88 0.00 -0.27

8 Sanghvi Sheetal Vikram 280526 2.02 0.00 280526 1.88 0.00 -0.14

9 Sanghvi Babulal Sagarmal (HUF)

262857 1.89 0.00 262857 1.77 0.00 -0.13

10 Mahesh Babulal Sanghvi 253894 1.83 0.00 253894 1.70 0.00 -0.12

11 Sanghvi Naresh Babulal (HUF)

112000 0.81 0.00 112000 0.75 0.00 -0.05

12 Sanghvi Jayantilal Babulal (HUF)

112000 0.81 0.00 112000 0.75 0.00 -0.05

13 Vikram Babulal Sanghvi (HUF)

83394 0.60 0.00 83394 0.56 0.00 -0.04

14 Babitadevi Laxmichand Mehta

24930 0.18 0.00 29930 0.20 0.00 0.02

15 Jitendra Jugalkishor Munot

24032 0.17 0.00 24032 0.16 0.00 -0.01

16 Anila Jugalkishor Munot 20984 0.15 0.00 20984 0.14 0.00 -0.01

17 Vikram Laxmichand Mehta

17136 0.12 0.00 17136 0.12 0.00 -0.01


Sl No.

Shareholder's Name Shareholding at the end of the year as on 31.03.2015

Shareholding at the end of the year as on 31.03.2016

% change in share holding

during the year


company


encumbered to total

shares


company


encumbered to total

shares

18 Piyush Laxmichand Mehta 11100 0.08 0.00 11100 0.07 0.00 -0.01

19 Gatiyadevi M Jain 3831 0.03 0.00 0 0.00 0.00 -0.03

20 Lalitkumar M Bhansali 4328 0.03 0.00 4328 0.03 0.00 0.00

21 Mahendra Mafatlal Jain 0 0.00 0.00 2012 0.01 0.00 0.01

22 Pukhraj H Bhansali 823 0.01 0.00 823 0.01 0.00 0.00

23 Hiralal Bhansali (HUF) 772 0.01 0.00 772 0.01 0.00 0.00

24 Lalitkumar M Bhansali (HUF)

698 0.01 0.00 698 0.00 0.00 0.00

Total 9083726 65.39 38.53 10088157 67.74 38.53 2.35

(iii) Change In Promoters’ Shareholding ( Specify If There Is No Change)

Sl. No

Name of Promoters Shareholding Date Increase/Decrease in

shareholding

Reason Cumulative Shareholding during the year

No.of shares at the beginning (01.04.2014) /

end of the year (31.03.2015)

% of total shares of the

company

No of shares % of total shares of the

company

1 Jayantilal Babulal Sanghvi 1675591 12.06 01.04.2015

25.01.2016 250000 Preferential Allotment

1925591 12.93

1925591 12.93 31.03.2016

2 Naresh Babulal Sanghvi 1582931 11.39 01.04.2015


1832931 12.31

1832931 12.31 31.03.2016

3 Babulal Sagarmal Sanghvi 1464283 10.54 01.04.2015


1714283 11.51

1714283 11.51 31.03.2016

4 Vikram Babulal Sanghvi 1255682 9.04 01.04.2015


1505682 10.11

1505682 10.11 31.03.2016

5 Sanghvi Bharmridevi Babulal

686634 4.94 01.04.2015 0 No Movement

686634 4.61 * 31.03.2016 686634 4.61

6 Sanghvi Meena Jayantilal 629300 4.53 01.04.2015 0 No Movement

629300 4.23 * 31.03.2016 629300 4.23

7 Sanghvi Kiran Naresh 576000 4.15 01.04.2015

1250 Inter folio transfer

577250 3.88 * 31.03.2016 577250 3.88

8 Sanghvi Sheetal Vikram 280526 2.02 01.04.2015

0 No Movement

280526 1.88* 31.03.2016 280526 1.88



27

Sl. No

Name of Promoters Shareholding Date Increase/Decrease in

shareholding





company


company

9 Sanghvi Babulal Sagarmal (HUF)

262857 1.89 01.04.2015 0 No Movement

262857 1.77 * 31.03.2016 262857 1.77

10 Mahesh Babulal Sanghvi 253894 1.83 01.04.2015 0 No Movement

253894 1.70* 31.03.2016 253894 1.70

11 Sanghvi Naresh Babulal (HUF)

112000 0.81 01.04.2015 0 No Movement

112000 0.75* 31.03.2016 112000 0.75

12 Sanghvi Jayantilal Babulal (HUF)

112000 0.81 01.04.2015 0 No Movement

112000 0.75* 31.03.2016 112000 0.75

13 Vikram Babulal Sanghvi (HUF)

83394 0.60 01.04.2015 0 No Movement

83394 0.56 * 31.03.2016 83394 0.56

14 Babitadevi Laxmichand Mehta

24930 0.18 01.04.2015

7.05.2015 5000 Market Purchase 29930 0.20

29930 0.20 31.03.2016

15 Jitendra Jugalkishor Munot 24032 0.17 01.04.2015 0 No Movement

24032 0.16 * 31.03.2016 24032 0.16

16 Anila Jugalkishor Munot 20984 0.15 01.04.2015 0 No Movement

20984 0.14 * 31.03.2016 20984 0.14

17 Vikram Laxmichand Mehta 17136 0.12 01.04.2015

0 No Movement

17136 0.12 31.03.2016 17136 0.12

18 Piyush Laxmichand Mehta 11100 0.08 01.04.2015 0 No Movement

11100 0.07 * 31.03.2016 11100 0.07

19 Gatiyadevi M Jain 3831 0.03 01.04.2015

09.10.2015 -3831 Market Sale 0 0.00

0 0.00 31.03.2016

20 Lalitkumar M Bhansali 4328 0.03 01.04.2015 0 No Movement

4328 0.03 31.03.2015 4328 0.03

21 Mahendra Mafatlal Jain 0 01.04.2015

18.01.2016 2012 Market Purchase 2012 0.014

2012 0.01 31.03.2016

22 Pukhraj H Bhansali 823 0.01 01.04.2015 0 No Movement

823 0.01 31.03.2016 823 0.01

23 Hiralal Bhansali 772 0.01 01.04.2015 0 No Movement

772 0.01 31.03.2016 772 0.01

24 Lalitkumar M Bhansali 698 0.01 01.04.2015 0 No Movement

698 0.01 31.03.2016 698 0.01

3831 0.03 31.03.2015

* Decrease in the % of total shares of the Company is due to Preferentai Allotment


(iv) Shareholding Pattern of top ten Shareholders (other than Direcors, Promoters & Holders of GDRs & ADRs)

Sl. No

For each of the Top 10 Shareholders

Shareholding Date Increase/Decrease in

shareholding





company


company

1 Dango & Dienthal GMBH & Co. Ltd.

359029 2.70 01.04.2015 0 No movement

359029 2.41* 31.03.2016 359029 2.41

2 Dango & Dienthal GMBH & Co. Ltd.

340952 2.57 01.04.2015 0 No movement

340952 2.29* 31.03.2016 340952 2.29

3 Sanghvi Tinadevi Mahesh 177169 1.33 01.04.2015

0 No movement

177169 1.19* 31.03.2016 177169 1.19

4 Sanghvi Pyaridevi Mohanlal 170798 1.28 01.04.2015 0 No movement

170798 1.15* 31.03.2016 170798 1.15

5 Mahesh B. Sanghvi 100000 0.75 01.04.2015 0 No movement

100000 0.67* 31.03.2016 100000 0.67

6 Amit Simrathmal Jain 55232 0.42 01.04.2015

15.08.2015 0.00 No movement 55232.00 0.37

55232 0.37* 31.03.2016

7 Trustline Holdings Pvt Ltd 83885 0.60 01.04.2015

0 No movement 83885 0.56

83885 0.56* 31.03.2016

8 Snehal Bhupendra Shah 70000 0.50 17.04.2015 30000.00 Market Purchase 100000.00 0.72

22.05.2015 30000 Market Purchase 130000.00 0.94

18.03.2016 25000 Market Purchase 155000.00 1.04

155000 1.04 31.03.2016

9 PRANEET MULTI PACK INDIA PVT LTD

0 0.00 17.04.2015 34118 Market Purchase 34118 0.25

24.04.2015 20000 Market Purchase 54118 0.39

08.05.2015 2500 Market Purchase 56618 0.41

22.05.2015 882 Market Purchase 57500 0.41

57500 0.39 31.03.2016 57500 0.39

10 SURABHI SHAH 0 0.00 07.08.2015 40000 Market Purchase 40000 0.29

14.08.2015 4000 Market Purchase 44000 0.32

28.08.2015 75959 Market Purchase 119959 0.86

04.09.2015 41 Market Purchase 120000 0.86

11.03.2015 -25000 Market Sale 95000 0.64

95000 0.64 31.03.2016 95000 0.64

* Decrease in the % of total shares of the Company is due to Preferentai Allotment



29

(v) Shareholding of Directors & Key Managerial Personnel:

Sl. No

For Each of the Directors and KMP

Shareholding Date Increase/Decrease in

shareholding





company


company

1 Shri Jayantilal Babulal Sanghvi - Managing Director

1675591 12.06 01.04.2015


1925591 12.93

1925591 12.93 31.03.2016

2 Shri Naresh Babulal Sanghvi - Wholetime Director

1582931 11.39 01.04.2015


1832931 12.31 31.03.2016 1832931 12.31

3 Shri Babulal Sagarmal Sanghvi - Wholetime Director

1464283 10.54 01.04.2015


1714283 11.51

1714283 11.51 31.03.2016

4 Shri Vikram Babulal Sanghvi - Wholetime Director& CFO

1255682 9.04 01.04.2015


1505682 10.11

1505682 10.11 31.03.2016

5 Shri Ram Chandra Prasad - Independent Director

- - - - - - -

6 Shri Y Shantaram - Independent Director

- - - - - - -

7 Shri Baba Pai - Independent Director

- - - - - - -

8 Shri Ram Swaroop Kaushal - Independent Director

- - - - - - -

9 Mrs. Jyoti Vinay Meghani - Independent Director *

10 Mrs. Aruna Khasgiwala - Independent Director **

- - - - - - -

11 Mr. Sagar Pandya- Company Secretary ***

12 Mr. Keval Thakkar - Company Secretary ****

- - - - - - -

* Up to 29.09.2015

** W.e.f 29.09.2015

*** Up to 30.10.2015

**** W.e.f 01.12.2015


V. Indebtedness Indebtedness of the Company including interest outstanding/accrued but not due for payment ( H in Lacs)

Secured Loans excluding

deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtness at the beginning of the financial year

i) Principal Amount 984.17 580.22 - 1564.39

ii) Interest due but not paid 17.67 - - 17.67

iii) Interest accrued but not due

Total (i+ii+iii) 1001.84 580.22 - 1582.06

Change in Indebtedness during the financial year

Additions 253 962.21 - 1215.21

Reduction (592.55) (469.87) - (1062.42)

Net Change (339.55) 492.34 - 152.79

Indebtedness at the end of the financial year

i) Principal Amount 9268.84 1072.56 - 10341.4

ii) Interest due but not paid 251 - - 251

iii) Interest accrued but not due - - - -

Total (i+ii+iii) 9519.84 1072.56 - 10592.4

VI Remuneration of Directors and Key Managerial Personnel A. Remuneration to Managing Director, Whole time director and/or Manager: ( H in Lacs)

Sl No.

Particulars of Remuneration Name of the MD/WTD/Manager Total AmountMr. Babulal

Sanghvi - WTD

Mr. Jayanti B. Sanghvi

- MD

Mr. Naresh B. Sanghvi

- WTD

Mr. Vikram B. Sanghvi -

WTD & CFO

1 Gross salary

(a) Salary as per provisions

contained in section 17(1) of the

Income Tax. 1961.

22.68 20.21 20.08 20.08 83.05

(b) Value of perquisites u/s 17(2) of

the Income tax Act, 1961

1.93 0.39 0.39 0.39 3.10

(c ) Profits in lieu of salary under

section 17(3) of the Income Tax

Act, 1961

- - - - -

2 Stock option - - - - -

3 Sweat Equity - - - - -

4 Commission

as % of profit - - - - -

others (specify) - - - - -

5 Others, please specify - - - - -

Total (A) 24.61 20.60 20.47 20.47 86.15

Ceiling as per the Act 27 24 24 24 99.00



31

B. Remuneration to other directors: ( H in Lacs)

Sl No.

Particulars of Remuneration Name of the Directors Total AmountMr.

R.S.Kaushal Mr. Baba

PaiMr. Y

ShantaramMr. R.C. Prasad

Mrs. Aruna Khasgiwala

1 Independent Directors

(a) Fee for attending Board /

Committee meetings

1.10 1.10 1.00 1.00 1.00 5.20

(b) Commission - - - - - -

(c ) Others, please specify - - - - - -

Total (1) 1.10 1.10 1.00 1.00 1.00 5.20

2 Other Non Executive Directors

(a) Fee for attending

board committee meetings

- - - - - -

(b) Commission - - - - - -

(c ) Others, please specify. - - - - - -

Total (2) - - - - - -

Total (B)=(1+2) 1.10 1.10 1.00 1.00 1.00 5.20

Total Managerial Remuneration - - - - - -

Overall Cieling as per the Act. - - - - - -

C. Remuneration to Key Managerial Personnel Other than MD/Manager/WTD ( H in Lacs)

Sl No.

Particulars of Remuneration Key Managerial Personnel Total AmountMr. Sagar Pandya-

Company Secretary (up to October 30, 2015)

Mr. Keval Thakkar - Company Secretary (From

December 01, 2015)

1 Gross Salary

(a) Salary as per provisions contained in

section 17(1) of the Income Tax Act, 1961.

2.33 1 3.33

(b) Value of perquisites u/s 17(2) of the

Income Tax Act, 1961

0.00 0.00 0.00

(c ) Profits in lieu of salary under section

17(3) of the Income Tax Act, 1961

0.00 0.00 0.00

2 Stock Option 0.00

3 Sweat Equity 0.00

4 Commission 0.00

-as % of profit 0.00

-others, specify 0.00

5 Others, please specify 0.00

Medical reimbursement 0 0.00

Total 2.33 1.00 3.33


VII Penalties/Punishment/Comppounding of Offences

Type Section of the Companies Act

Brief Description

Details of Penalty/

Punishment/Compounding fees imposed

Authority (RD/NCLT/Court)

Appeall made if any (give

details)

A. COMPANY

Penalty

NOPunishment

Compounding

B. DIRECTORS

Penalty

NOPunishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

NOPunishment

Compounding



33

Annexure-C to Board’s ReportDetails pertaining to remuneration as required under section 197(12) of the companies act, 2013 read with rule 5(1)

of the Companies (Appointment and remuneration of managerial personnel) rules, 2014.

i) The Ratio of remuneration of each Director to the median remuneration of the employee of the Company for the

financial year 2015-16. The percentage increase in remuneration of each Director, Chief Financial Officer and Company

Secretary during the financial year 2015-16 is as under:

Sl No.

Name of Director/KMP and Designation Remuneration of Director/KMP for

financial year 2015-2016 (H In Lacs)

Ratio of remuneration of each Director/to

median remuneration of employee

% increase in Remuneration in the Financial

Year

1 Shri. Babulal S. Sanghvi – Wholetime

Director

24.61 18 : 1 20

2 Shri. Jayanti B. Sanghvi – Managing

Director

20.60 15 : 1 20

3 Shri. Naresh B. Sanghvi - Wholetime

Director

20.47 15 : 1 20

4 Shri. Vikram B. Sanghvi - Wholetime

Director and CFO

20.47 15 : 1 20

5 Mr. Sagar Pandya – Company Secretary * 2.33 - -

6 Mr. Keval Thakkar** 1.00 - -

Note: No other Director other than Wholetime Director and Managing Director received any remuneration other than

sitting fees during the financial year 2015-16

* Details not given as he was Company Secretary for the part of financial year i.e. up to October 30, 2015

** Details not give as he is Company Secretary for the Part of financial year i.e. from December 01, 2015

ii) The median remuneration of employee of the Company during the financial year was H.1.34 Lacs

iii) In the financial year, there was an increase of percentage % in the median remuneration of employees. - NA

iv) There were 249 permanent employees on the rolls of the Company as on March 31, 2016.

v) Relationship between average increase in remuneration and company performance:

There is no direct relationship with Company performance in view of the loss incurred. Routine increments, cost of

living and employee retention are as per policy of the Company.

vi) Comparison of remuneration of the Key Managerial Personnel against the performance of the Company:

The Company reported a loss during the year. Remuneration of Key Managerial Personnel has been detailed in MGT-9

: Extract of Annual Return.

vii) Variation in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial

year and previous financial year and percentage increase over decrease in market quotations of the shares of the

Company in comparison to the rate at which the Company come out with last public offer :


On the behalf of the Board of Director

Place: Vadodara Babulal S. SanghviDate : May 25, 2016 Chairman

Closing market price per share (H)

Percentage Decrease

Price earnings ratio Market capitalisation (H In Lacs)

March 31, 2015

March 31, 2016

March 31, 2015

March 31, 2016

March 31, 2015

March 31, 2016

BSE 43.10 41.10 4.64% * * 5987.57 5709.72

NSE 45.85 41.35 9.81% * * 6369.60 5744.45

The Company’s shares are listed on BSE Limited and National Stock Exchange of India Limited.

* PE ratio not computed as EPS is negative.

viii) Average percentage increase made in the salaries of employees other than the managerial personnel in the financial

year 2015-2016 was 11%.

ix) The key parameters for the variable component of remuneration availed by the directors and considered by the Board

of Directors based on the recommendation of the Nomination and Remuneration Committee as per Remuneration

Policy for Directors and Senior Management.

x) The ratio of the remuneration of the highest paid director to that of the employee who are not directors but receive

remuneration in excess of the highest paid director during the year: The Wholetime Director, Mr. Babulal Sanghvi is

the highest paid Director. No employee received remuneration higher than Mr. Babulal Sanghvi.

xi) It is hereby affirmed that the remuneration paid during the year ended March – 2016 is as per Remuneration policy of

the Company.



35

Annexure-D to Board’s ReportCONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNINGS AND OUTGO[Section 134(3)(m) of The Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014]

A. Conservation of Energy(i) Steps taken or impact on conservation of energy; Energy saving in terms of electricity consumption

is our prime concern. The Company utilises several

systems to conserve energy. Well planned preventive

maintenance measures improved our operational

efficiency.

(ii) Steps taken by the company for utilising alternate sources of energy;

Water and air pollution control measures are in place

and industrial trade effluents are used for gardening

after adjusting the PH. The Tree plantation at the

factory site is maintained properly.

(iii) Capital investment on energy conservation equipments;

During the year company has not invested in energy

conservation equipments.

B. Technology absorption (i) Efforts made towards technology absorption; • Continuous emphasis on significant upgrading of

manufacturing facility to improve product quality.

(ii) Benefits derived like product improvement, cost reduction, product development or import substitution;

• Overall annual production increased through

maximum utilisation of production capacity.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

a the details of technology

imported;

Not applicable

b the year of import;

c whether the technology

been fully absorbed;

d if not fully absorbed, areas

where absorption has not

taken place, and the reasons

thereof; and

(iv) Expenditure incurred on Research and Development. • The Company has undertaken no R & D activities

C. Foreign Exchange Earnings And Outgo The Foreign Exchange earned in terms of actual

inflows during the year and the Foreign Exchange

outgo during the year in terms of actual outflows.

• Earnings in foreign currency (on receipt basis)

(H In lac)

Particulars Amount 2016-17

Amount 2015-16

F.O.B. value of export 1788.45 1136.75

Total 1788.45 1136.75

• Expenditure in foreign currency (on payment

basis)

(H In lac)

Particulars Amount 2016-17

Amount 2015-16

CIF value of import 140.65 637.90

Other miscellaneous 102.32 222.73

Total 242.97 860.63

On the behalf of the Board of Director



For Sanghvi Forging and Engineering Limited


Form AOC-I(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Part “A”: Subsidiaries

Statement containing salient features of the financial statement of subsidiaries/ associate companies/ joint ventures

Sr. No.

Particulars Details

1 Sl. No. 1

2 Name of the subsidiary Sanghvi Europe B.V.

3 Reporting period for the subsidiary concerned, if

different from the holding company’s reporting period

January to December 2015

4 Reporting currency and Exchange rate as on the last

date of the relevant Financial year in the case of foreign

subsidiaries.

Currency : EURO

Exchange rate : 75.10

5 Share capital EURO 100

6 Reserves & surplus 813659.74

7 Total assets 29260737.50

8 Total Liabilities 29260737.50

9 Investments 0.00

10 Turnover 32958680.02

11 Profit before taxation 611544.72

12 Provision for taxation 79877.89

13 Profit after taxation 531666.83

14 Proposed Dividend -

15 % of shareholding 100 %

Notes: The following information shall be furnished at the end of the statement:

1. Names of subsidiaries which are yet to commence operations: NA

2. Names of subsidiaries which have been liquidated or sold during the year. : NA

Part “B”: Associates and Joint VenturesStatement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint

Ventures :- NA

(Information in respect of each subsidiary to be presented with amounts in H )



37

Corporate Governance Report

Company’s Philosophy on Corporate GovernanceSFEL’s philosophy on Corporate Governance is embedded

in the rich legacy of ethical governance practices, most of

which were implemented before they were mandatorily

prescribed. Integrity, transparency, accountability and

compliance with laws which are the columns of good

governance are cemented in the Company’s robust business

practices to ensure ethical and responsible leadership both

at the Board and at the Management level. The Company’s

Code of Business Conduct and its well-structured

internal control systems which are subjected to regular

assessment for its effectiveness, reinforces integrity of

Management and fairness in dealing with the Company’s

stakeholders. This, together with meaningful CSR activities

and sustainable development policies followed by the

Company has enabled your Company to earn the trust and

goodwill of its investors, business partners, employees and

the communities in which it operates. Your Company has

complied with the requirements of Corporate Governance

as laid down under clause 49 of the Listing Agreement and

SEBI (Listing Obligations and Disclosure Requirements)

regulations, 2015.

Governance StructureSFEL’s Governance structure broadly comprises the

Board of Directors and the Committees of the Board

at the apex level and the Management structure at the

operational level. This layered structure brings about a

harmonious blend in governance as the Board sets the

overall corporate objectives and gives direction and

freedom to the Management to achieve these corporate

objectives within a given framework, thereby bringing

about an enabling environment for value creation through

sustainable profitable growth.

Board of Directors :{A} Composition of the Board(i) The management of your Company is entrusted to

the Managing Director, who is assisted by a core

management team and senior executives having rich

experience and expertise in their respective fields.

(ii) None of the Directors on the Board is a member

of more than 10 committees or a chairman of more

than 5 committees as specified in Clause 49 of the

Listing Agreement or Regulation 26 of SEBI (Listing

Obligations and Disclosure Requirements) regulations,

2015, across all the Indian Public Companies, in which

he is a Director. The necessary disclosure regarding the

committee position has been made by the Directors.

(iii) The names and categories of the Directors of the

Board, their attendance at Board Meetings held

during the year and the number of directorships and

committee chairmanship/ membership held by them

in Indian Public Companies are given herein below.

Directorships do not include alternate directorship,

directorships of private limited companies, Section

8 companies under Companies Act, 2013 (Section

25 under Companies Act, 1956) and of companies

incorporated outside India. For reckoning the

maximum number of chairmanships/memberships,

only two committees viz, Audit Committee and

Shareholders’/Investors’ Grievance Committee of the

Board are considered.

The Directors present the Company’s Report on Corporate Governance for the year ended March 31, 2016.


Sl.No.

Name of the Directors

Status No. of directorship

in other public

limited company

Number of committee positions held in other public

limited company

No. of Board Meetings

The lastAGM

attended :

‘Yes’ or ‘No’Member Chairman Held Attended

1 Shri Babulal S

Sanghvi, Chairman

Promoter

Executive

Nil Nil Nil 4 3 Yes

2 Shri Jayanti B

Sanghvi, Managing

Director

Promoter

Executive

Nil Nil Nil 4 4 Yes

3 Shri Naresh B

Sanghvi, Wholetime

Director

Promoter

Executive

Nil Nil Nil 4 4 Yes

4 Shri Vikram B

Sanghvi, Wholetime

Director

Promoter

Executive

Nil Nil Nil 4 4 Yes

5 Shri Shantaram

Yarlagadda, Director

Non- Executive

and Independent

Nil Nil Nil 4 4 Yes

6 Shri Ram C Prasad,

Director

Non- Executive

and Independent

Nil Nil Nil 4 4 Yes

7 Shri Baba Pai,

Director

Non- Executive

and Independent

Nil Nil Nil 4 4 Yes

8 Shri Ram S Kaushal,

Director

Non- Executive

and Independent

Nil Nil Nil 4 4 Yes

9 Ms. Jyoti V.

Menghani (ceased

to be Director on

29.05.2015)

Non- Executive

and Independent

Nil Nil Nil 4 0 No

10. Mrs. Aruna S

Khasgiwala

Appointed on

29.05.2015 &

Regularized in AGM

dated September

29, 2015

Non- Executive

and Independent

Nil Nil Nil 4 4 Yes

The Company did not have any material pecuniary

relationship or transactions with the Independent Non-

Executives Directors during the year 2015-16.

Disclosure of relationship between directors inter-seShri Babulal Sanghvi, Chairman is father of Shri Jayantilal

Sanghvi, Managing Director, Shri Naresh Sanghvi,

Wholetime Director and Shri Vikram Sanghvi, Wholetime

Director of the Company. None of the other Directors are

related to each other.

There were 4 Board meetings held during the financial year

April 1, 2015 to March 31, 2016. These were on May 29, 2015,

August 12, 2015, October 30, 2015, and February 08, 2016.

Details of the Directors being appointed/ reappointedDirector Retires by RotationIn terms of Sections 149, 152 and any other applicable

provisions of the Companies Act, 2013 effective from April

1, 2014, Independent Directors shall not be counted for

the purpose of determining the directors liable to retire by



39

rotation. Shri Vikram B. Sanghvi accordingly retires at the

ensuing Annual General Meeting and being eligible offers

himself for re-appointment.

Shri Vikram Babulal Sanghvi, aged 33, he is a gold medalist

from Sardar Patel University in Bachelor of Business

Administration and has completed his Master degree in

Business Administration from the ICFAI University. He has

completed a course of Chartered Financial Analyst from ICFAI

University. He has over 11 years of experience in the field of

forging industry. He is looking after overall supervision of

the operations and administration activities in the Company

He holds 15,05,682 (10.11%) Equity Shares of H.10/- each in

the Company. He is Member of Audit Committee and Share

Transfer Committee of the Company.

Except for the appointee, Shri Vikram B. Sanghvi and his

relative i.e. Shri Babulal S. Sanghvi, Shri Jayanti B. Sanghvi

and Shri Naresh B. Sanghvi, none of the other Directors

and Key Managerial Personnel of the Company and their

relatives is concerned or interested in the aforesaid

Re-appointment.

Board of Director’s ProfileShri Babulal Sagarmal Sanghvi, aged 64, he has more

than 36 years of experience in the forging industry. He is

responsible for implementing the overall business strategy

of the Company. He holds 17,14,283 (11.51%) Equity

Shares of H.10/- each in the Company. He does not hold

any Chairmanship or any Membership in the Company or

any other Company. He is the Chairman of the Board of the

Board of Directors.

Shri Jayanti Babulal Sanghvi, aged 39, he is a gold medalist

from Sardar Patel University in Bachelor of Business

Administration. He has over 17 years of experience in

manufacturing and retailing of flanges and other forging

items and has been instrumental in driving the growth of

our business. He leads the domestic marketing, finance

and sales functions of the Company. He holds 19,25,591

(12.93%) Equity Shares of H.10/- each in the Company. He

hold Chairmanship in Management Committee, Allotment

Committee, Share Transfer Committee and Corporate

Social Responsibility Committee of the Company.

Shri Naresh B. Sanghvi, aged 38 years, he has more

than 16 years of experience in forging industry. He is

responsible for all export related activities of our Company

and identification of growth potentials in various overseas

markets. He holds 18,32,931 (12.31%) Equity Shares

of H.10/- each in the Company. He does not hold any

Chairmanship or any Membership in the Company.

Shri Shantaram Surya Prakasarao Yarlagadda, aged 76,he

holds degree in mathematics and mechanical engineering.

He has worked as scientific officer at the Department of

Atomic Energy, Government of India. He has worked in

various capacities at the Rajasthan Atomic Power Project,

Madras Atomic Power Project, Kakrapar Atomic Power

Project, Kaiga Atomic Power Project and Tarapur Atomic

Power Project. He finally retired as a Director after 40 years

of service in the Department of Atomic Energy Government

of India. He is also a member emeritus of the India Nuclear

Society. He is member of Audit Committee and Nomination

and Remuneration Committee of the Company. He does

not hold any Directorship and Membership in any other

company.ShriYarlagadda does not hold any Shares in the

Company.

Dr. Ram Chandra Prasad, aged 67, he holds a doctorate

in metallurgical engineering from the Indian Institute of

Science, Bangalore. He has worked as assistant professor

at the National Institute of Foundry and Forge Technology,

Ranchi and as professor at the Indian Institute of

Technology, Bombay since 1986. He has honored with the

Distinguish Alumnus Award at BIT Sindri in the year 2002.

He was chairman of IIM Mumbai chapter during the period

from 1999 and 2000. He is member of Nomination and

Remuneration Committee and Stakeholders Relationship

Committeeof the Company. He does not hold any

Directorship and Membership in any other company. Dr.

Prasad does not hold any Shares in the Company.

Dr. Baba Karnire Pai, aged 62, he holds a doctorate in

metallurgical engineering from the Indian Institute of

Technology Bombay. He was Professor and the Head

of Metallurgical and Materials Engineering faculty of

Technology and Engineering at MS University Kalabhavan,

Vadodara. He is currently Director of Institute of Technology

& Management Universe, Vadodara. He is Chairman in

Nomination and Remuneration Committee and member of

Audit Committee, Stakeholders Relationship Committee,

Allotment Committee, Management Committee and

Corporate Social Responsibility Committee of the Company.

He does not hold any Directorship and Membership in any

other company. De. Pai does not hold any Shares in the

Company.

Shri Ram Swaroop Kaushal, aged 69, he is a banker by

profession and holds a Masters degree in Arts. He was

previously employed with State bank of India. He has vast

years of experience in the Banking sector. He is a certified

Associate of the Indian Institute of Bankers. He is presently

working as an Advisor (Learning & Development) with

SBI Mutual Fund. He is Chairman of Audit Committee

and Stakeholders Relationship Committee and Member

of Allotment Committee, Management Committee

and Corporate Social Responsibility Committee of the


Company. He does not hold any Directorship and

Membership in any other company. Shri Kaushal does not

hold any Shares in the Company.

Dr. Aruna Khasgiwala, aged 65, she is Retd. professor,

former DEAN (2003-2010), former head ( 2003-2008)

faculty of Social Work in the M. S. University of Baroda.

She holds degree of M.A. (Social Work) specialization,

Medical & Psychiatric Social Work, Delhi University, Ph. d.

(Social Work) M.S. University of Baroda, she has over 41

years of experience in teaching and field. She does not

hold any Chairmanship and Membership of the Company

or any other Company. Dr. Aruna Khasgiwala does not hold

Shares in the Company.

Board ProcedureThe annual calendar of meeting is agreed upon at the

beginning of each year. Board Meetings are held atleast

once in every quarter. In addition to this, Board Meetings

are convened to transact special businesses, as and when

necessary. The meetings are governed by a detailed

agenda. All major issues included in the agenda are backed

up by comprehensive background information to enable

the Board to take informed decisions.

The agenda papers, containing detailed notes on various

agenda items and other information, which would enable

the Board to discharge its responsibilities effectively, are

circulated in advance to the Directors. The Board is briefed

on all the matters of the Company at its meeting.

The Board has complete access to all the information of

the Company.

The following information is provided to the Board as and

when occasion arises:

1. Annual operating plans and budgets and any updates.

2. Capital budgets and any updates.

3. Quarterly results for the company and its operating

divisions or business segments.

4. Minutes of meetings of audit committee and other

committees of the board.

5. The information on recruitment and remuneration of

senior officers just below the board level, including

appointment or removal of Chief Financial Officer and

the Company Secretary.

6. Show cause, demand, prosecution notices and penalty

notices which are materially important.

7. Fatalor serious accidents, dangerous occurrences, any

material effluent or pollution problems.

8. Any material default in financial obligations to and by

the company, or substantial nonpayment for goods

sold by the company.

9. Any issue, which involves possible public or product

liability claims of substantial nature, including any

judgement or order which, may have passed strictures

on the conduct of the company or taken an adverse

view regarding another enterprise that can have

negative implications on the company.

10. Details of any joint venture or collaboration agreement.

11. Transactions that involve substantial payment towards

goodwill, brand equity, or intellectual property.

12. Significant labour problems and their proposed

solutions. Any significant development in Human

Resources/ Industrial Relations front like signing

of wage agreement, implementation of Voluntary

Retirement Scheme etc.

13. Sale of material nature, of investments, subsidiaries,

assets, which is not in normal course of business.

14. Quarterly details of foreign exchange exposures and

the steps taken by management to limit the risks of

adverse exchange rate movement, if material.

15. Non-compliance of any regulatory, statutory or listing

requirements and shareholders service such as non-

payment of dividend, delay in share transfer etc.

Board Training and InductionAt the time of appointing a Director, a formal letter of

appointment is given to him, which inter alia explains the

role, function, duties and responsibilities expected of him as a

Director of the Company. The Director is also explained in detail

the compliances required from him under the Companies

Act, Listing Regulations and other related regulations and his

affirmation taken with respect to the same.

Committees of Board of DirectorsThe Company has formed an Audit Committee, Nomination

and Remuneration Committee,Stakeholders’ Relationship

Committee, Corporate Social Responsibility Committee,

Share Transfer Committee, Allotment Committee,

Management Committee and Risk Management

Committee. The details of these committee meetings are

mentioned here in below:

A. Audit CommitteeAudit Committee comprises of experts specialized in

accounting/financial management. The Chairman of the

Audit Committee is a Non-Executive and Independent

Director. Details of the meetings of the Audit Committee

held during the FY 2015-16 are as under:



41

Name Designation Category Attendance

May 29, 2015

August 12, 2015

October 30, 2015

February 08, 2016

Shri Ram S Kaushal Chairman Non-Executive and

Independent

Yes Yes Yes Yes

Shri Baba Pai Member Non-Executive and

Independent

Yes Yes Yes Yes

Shri Vikram B Sanghvi Member Executive and Non-

Independent

Yes Yes Yes Yes

Shri Shantaram Yarlagadda Member Non-Executive and

Independent

Yes Yes Yes No

The Company Secretary acts as the Secretary to the

Committee. The Managing Director, Whole time Director

and the Statutory Auditors are permanent invitees to the

Meetings. The terms of reference of the Audit Committee

are in accordance with the Section 177 of the Companies

Act, 2013 Clause 49 of the Listing Agreement /or and

SEBI (Listing Obligations and Disclosure requirements)

Regulations, 2015.

The Audit Committee assists the Board in its responsibility

for overseeing the quality and integrity of the accounting,

auditing and reporting practices of the Company and its

compliance with legal and regulatory requirements. The

Committee’s purpose is to oversee the accounting and

financial reporting process of the Company, the audits

of the Company’s financial statements, the appointment,

independence, performance and remuneration of the

statutory auditors including the Cost auditors, the

performance of internal auditors and the Company’s

risk management policies. The Chairman of the Audit

Committee was present at the Annual General Meeting to

answer the shareholders queries.

Terms of reference: The terms of reference of the Audit

Committee are as under:

a) Power of Audit Committee1. To investigate any activity within its terms of reference.

2. To seek information from any employee.

3. To obtain outside legal or other professional advice.

4. To secure attendance of outsiders with relevant

expertise, if it considers necessary.

b) The Role of Audit Committee includes1. Oversight of the company’s financial reporting process

and the disclosure of its financial information to ensure

that the financial statement is correct, sufficient and

credible;

2. Recommendation for appointment, remuneration and

terms of appointment of auditors of the company;

3. Approval of payment to statutory auditors for any

other services rendered by the statutory auditors;

4. Reviewing, with the management, the annual financial

statements and auditor’s report thereon before

submission to the board for approval, with particular

reference to:

a. Matters required to be included in the Director’s

Responsibility Statement to be included in the

Board’s report in terms of clause (c) of sub-section

3 of section 134 of the Companies Act, 2013

b. Changes, if any, in accounting policies and

practices and reasons for the same

c. Major accounting entries involving estimates

based on the exercise of judgment by management

d. Significant adjustments made in the financial

statements arising out of audit findings

e. Compliance with listing and other legal

requirements relating to financial statements

f. Disclosure of any related party transactions

g. Qualifications in the draft audit report

5. Reviewing, with the management, the quarterly

financial statements before submission to the board

for approval;

6. Reviewing, with the management, the statement of

uses / application of funds raised through an issue

(public issue, rights issue, preferential issue, etc.), the

statement of funds utilized for purposes other than

those stated in the offer document / prospectus / notice

and the report submitted by the monitoring agency

monitoring the utilisation of proceeds of a public or


rights issue, and making appropriate recommendations

to the Board to take up steps in this matter;

7. Review and monitor the auditor’s independence and

performance, and effectiveness of audit process;

8. Approval or any subsequent modification of

transactions of the company with related parties;

9. Scrutiny of inter-corporate loans and investments;

10. Valuation of undertakings or assets of the company,

wherever it is necessary;

11. Evaluation of internal financial controls and risk

management systems;

12. Reviewing, with the management, performance of

statutory and internal auditors, adequacy of the

internal control systems;

13. Reviewing the adequacy of internal audit function,

if any, including the structure of the internal audit

department, staffing and seniority of the official

heading the department, reporting structure coverage

and frequency of internal audit;

14. Discussion with internal auditors of any significant

findings and follow up there on;

15. Reviewing the findings of any internal investigations

by the internal auditors into matters where there is

suspected fraud or irregularity or a failure of internal

control systems of a material nature and reporting the

matter to the board;

16. Discussion with statutory auditors before the audit

commences, about the nature and scope of audit as well

as post-audit discussion to ascertain any area of concern;

17. To look into the reasons for substantial defaults in

the payment to the depositors, debenture holders,

shareholders (in case of non-payment of declared

dividends) and creditors;

18. To review the functioning of the Whistle Blower

mechanism;

19. Approval of appointment of CFO (i.e., the whole-

time Finance Director or any other person heading

the finance function or discharging that function)

after assessing the qualifications, experience and

background, etc. of the candidate;

20. Carrying out any other function as is mentioned in the

terms of reference of the Audit Committee.

B. Nomination and Remuneration and CommitteeNomination and Remuneration Committee pursuant

to Section 178 of the Companies Act, 2013 has been

constituted to recommend the remuneration package of

the Managing Director and Whole time Directors based on

the performance and defined criteria.

Role of the Nomination and Remuneration Committee are

as under:

1. Formulation of the criteria for determining

qualifications, positive attributes and independence

of a director and recommend to the Board a policy,

relating to the remuneration of the directors, key

managerial personnel and other employees;

2. Formulation of criteria for evaluation of Independent

Directors and the Board;

3. Devising a policy on Board diversity;

4. Identifying persons who are qualified to become

directors and who may be appointed in senior

management in accordance with the criteria laid down,

and recommend to the Board their appointment and

removal. The company shall disclose the remuneration

policy and the evaluation criteria in its Annual Report.

Composition of Nomination and Remuneration Committee and its meeting held during financial year 2015-16 are as under :

Name Designation Category Attendance May 29, 2015

Shri Baba Pai Chairman Non-Executive and Independent Yes

Shri Ram C Prasad Member Non-Executive and Independent Yes

Shri Shantaram Yarlagadda Member Non-Executive and Independent Yes

Performance Evaluation Criteria for Independent DirectorsThe performance evaluation criteria’s for Independent Directors are disclosed in the Board’s Report.



43

Name of Director Designation Salary andPerquisites

J In Lacs

Variable PerformanceBonus

Commission Total

Shri Babulal S Sanghvi Chairman 26.61 - - 26.61

Shri Jayanti B Sanghvi Managing Director 20.60 - - 20.60

Shri Naresh B Sanghvi Wholetime

Director

20.47 - - 20.47

Shri Vikram B Sanghvi Wholetime

Director

20.47 - - 20.47

Name Directors Sitting fees (H In Lacs)

Shri Ram C Prasad 1.00

Shri Yarlagadda Shantaram 1.00

Shri Ram S Kaushal 1.10

Shri Baba Pai 1.10

Remuneration to Directorsa. Non-Executive and Independent Directors.The Non-Executive and Independent Directors do not draw remuneration other than sitting fees. The Company pays the

sitting fees to all the Non-Executive Directors at the rate of H 15,000 for attending each Meeting of the Board and H 10,000

for every other Committee meeting attended by him. The sitting fees paid to Non-Executive cum Independent Directors

for attending Board and Committee Meetings during the FY 2015-16 is as follows:

b. Executive Directors.The remuneration payable to the Managing Director, Wholetime Directors as recommended by the Remuneration

Committee and was approved by the Board of Directors in its Meeting when all the Directors were present. The salary

paid during the year to the Managing Director is within the ceiling prescribed by provisions of the Companies Act,2013.

The following remuneration paid to the Directors during the year ended March 31, 2016.

Policy for selection and appointment of Directors and their Remuneration The Nomination and Remuneration (N&R) Committee has

adopted a Policy which, inter alia, deals with the manner

of selection of Board of Directors, Managing Director and

their remuneration. Particulars of the Policy are accordingly

as under:

1. Criteria of selection of Non Executive Directorsa. The Non-Executive Directors shall be of high integrity

with relevant expertise and experience so as to have

a diverse Board with Directors having expertise in the

fields of manufacturing, marketing, finance, taxation,

law, governance and general management.

b. In case of appointment of Independent Directors,

the N&R Committee shall satisfy itself with regard to

the independent nature of the Directors vis-à-vis the

Company so as to enable the Board to discharge its

function and duties effectively.

c. The N&R Committee shall ensure that the candidate

identified for appointment as a Director is not

disqualified for appointment under Section 164 of the



d. The N&R Committee shall consider the following

attributes / criteria, whilst recommending to the

Board the candidature for appointment as Director.

i. Qualification, expertise and experience of the

Directors in their respective fields;

ii. Personal, Professional or business standing;

iii. Diversity of the Board.

e. In case of re-appointment of Non Executive

Directors, the Board shall take into consideration

the performance evaluation of the Director and his

engagement level.

2. RemunerationThe Non Executive Directors shall be entitled to receive

remuneration by way of sitting fees, reimbursement

of expenses for participation in the Board / Committee

meetings.

Non Executive Director shall be entitled to receive sitting

fees for each meeting of the Board or Committee of the

Board attended by him, of such sum as may be approved by

the Board of Directors within the overall limits prescribed

under the Companies Act, 2013 and The Companies

(Appointment and Remuneration of Managerial Personnel)

Rules, 2014;

3. Managing Director/Whole Time Directors - Criteria for selection / appointmentFor the purpose of selection of the MD/WTD, the N&R

Committee shall identify persons of integrity who possess

relevant expertise, experience and leadership qualities

required for the position and shall take into consideration

recommendation, if any, received from any member of the

Board.

The Committee will also ensure that the incumbent

fulfills such other criteria with regard to age and other

qualifications as laid down under the Companies Act, 2013

or other applicable laws.

4. Remuneration for the Managing Director/Whole Time Directorsi. At the time of appointment or re-appointment,

Managing Director/ Whole Time Directors shall be

paid such remuneration as may be mutually agreed

between the Company (which includes the N&R

Committee and the Board of Directors) and the

Managing Director/ Whole Time Directors within the

overall limits prescribed under the Companies Act,

2013.

ii. The remuneration shall be subject to the approval of

the Members of the Company in General Meeting.

C. Stakeholders Relationship CommitteeThe Stakeholders’ Relationship Committee comprises of

3 Directors viz. Shri R S kaushal, Shri. R C Prasad and Shri.

Baba Pai, Shri R S Kaushal, Independent Non-Executive

Director is Chairman of the Stakeholders’ Relationship

Committee. Shri R S Kaushal was present at the last

Annual General Meeting held on 29th September, 2015.

Mr. Keval Thakkar Company Secretary and Compliance

Officer of the Company acts as Secretary of the Committee.

The Primary Objective of the Stake holders Relationship

Committee is to oversee all matters concerned with the

securities and to look in to shareholders complaints relating

to transfer of shares, Non receipt of Annual Report, Non

receipt of Dividend etc.

The terms of reference committee are in line with

the requirement of Companies Act and SEBI Listing

Regulations.

During the year the Company has not received any

complaints from any shareholders.

In addition to the above committees, the Board has constituted the following committees:D. Corporate Social Responsibility CommitteeComposition of Corporate Social Responsibility Committee

are as under :

Name Designation

ShriJayanti B. Sanghvi Chairman

Shri Ram S Kaushal Member

Shri Baba Pai Member

E. Allotment CommitteeComposition of Allotment Committee is as under :

Name Designation



Shri Ram S. Kaushal Member

F. Management CommitteeComposition of Management Committee is as under:

Name Designation




G. Risk Management CommitteeRisk Evaluation and Management is an ongoing process

within the Organization. The Company has a robust risk

management framework to identify, monitor and minimize

risks as also identify business opportunities.



45

Risk Management Committee is not applicable to the

Company however the company has voluntarily constituted

Risk Management Committee.

Composition of Risk Management Committee is as under

Name Designation

Shri Jayanti B. Sanghvi Chairman



Independent Directors’ Meeting:During the year, the Independent Directors met on

October 30, 2015, inter alia, to discuss:

• Evaluation of the Performance of Non Independent

Directors and the Board of Directors as a whole;

• Evaluation of the Performance of Chairman of the

Company, taking into accounts the views of the

Executive and Non-Executive Directors.

• Evaluation of the quality, content and timelines of

flow of information between the Management and

the Board that is necessary for the Board to effectively

and reasonably perform its duties.

All the Independent Directors were present at the

Meeting.

Code of Conduct i) For prevention of Insider Trading The Company has a comprehensive Code of Conduct

bid down for its employees and Directors for the

prevention of insider trading. The Code lays down

guidelines and procedures to be followed and

disclosures to be made while dealing with the shares of

the Company and cautioning them on the consequence

of non-compliances. The Company Secretary has been

appointed as a Compliance Officer and is responsible

for adherence to Code for Prevention of Insider Trading.

ii) For Board of Directors and Employees The Board of Directors of the Company has laid down a

Code of Conduct for all Board Members and employees

of the Company. The Code of Conduct is posted on

the website of the Company, www.sanghviforge.com.

The Board members and employees have affirmed

compliance with the ’Code of Conduct’ for the year

ended March 31, 2016.

WebsiteIn accordance with requirement of SEBI (Listing Obligations

and Disclosure Requirements) Regulations, 2015

information about the Company is stored on the Company’s

website i.e. www.sanghviforge.com in a separate dedicated

section titled Investor Relations and is updated regularly.

General Body MeetingThe details of the last three AGM/EOGM of the Company:

Year AGM/EOGM Location Date Time No. of Special Resolution passed

2014-2015 AGM 244/6, G.I.D.C Ind. Estate,

Waghodia-39176

September29, 2015 5 p.m. 4


Waghodia-39176

September 26, 2014 5 p.m. 1

2013-2014 EOGM NIDRA HOTELS, Opp. Seven

Seas Mall, Fatehgunj, Vadodara

August 14, 2014 5 p.m. 2


Waghodia-39176

September 23, 2013 3 p.m. 0


Special Resolutions Were Approved At The Agm/Eogm.

AGM/EOGM Dated Particulars

AGM September 29, 2015 Re-appointment of MD, WTD for Five years

AGM September 26, 2014 Approval of Related Party transaction with Company U/s 188 of the Companies

Act, 2013

EOGM August 14, 2014 Issue and allot 10,00,000 Warrants to the Promoters U/s. 62 (1)(c),of the

Companies Act, 2013 under Preferential issue.

Borrowing Powers of Board of Directors U/s. 180 (1) (c) of the Companies Act,

2013

Postal BallotNo Special Resolution was put through postal ballot

during the period and there is no item in the notice for

the forthcoming Annual General Meeting requiring postal

ballot.

Disclosures a. Related Party Transactions, comprising of contracts

or arrangements with the related parties/entities

in which Directors are interested, are entered in the

Register of Contracts as per section 189 of the Act.

None of the transactions with any of the related

parties were in conflict with interest of Company as

per requirements of Accounting Standard 18, they

have been disclosed in notes to accounts annexed to

the financial statements.

b. None of the Non-Executive Directors has any material

pecuniary relationship or transaction with the

Company.

c. The Independent Directors have confirmed that they

meet the criteria of independence sa stipulated under

Section 149(6) of the Act, and SEBI (Listing Obligations

and Disclosures Requirements) Regulations, 2015.

d. There were no instances of non-compliance and no

restrictions and penalties have been imposed on the

Company by Stock Exchanges or SEBI or any Statutory

Authorities, on any matter related to capital market,

during last three years.

e. The Company has policy on Whistle Blower/ Vigil

Mechanism which is also posted on the website of the

Company no personnel has been denied to access the

Audit Committee.

f. There is no amount pending for transfer to the

Investor Education and Protection Fund under Section

125 of the Act.

g. Website Linkage for Policies:

1) Familiarisation Programme of Independent Directors:

http://www.sanghviforge.com/policies.php

2) Related Party Transaction Policy : http://www.

sanghviforge.com/policies.php

3) Whistler Blower Policy/Whistler Blower Policy:

http://www.sanghviforge.com/policies.php

Mandatory Requirements The Company has complied with the Mandatory

Requirement of SEBI (Listing Obligations and Disclosures

Requirements) Regulations, 2015.

Non Mandatory RequirementsThe Company has not complied with Non Mandatory

Requirements as specifically provided in Schedule II of

SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015



47

Disclosure of the compliance with corporate governance requirements specified in Regulation 17 to 27 and Clauses(b) to (i) of sub-regulation (2) of Regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements), 2015:

Regulation No. Particulars Compliance Status ( Yes/No)

17 Board of Directors Yes

18 Audit Committee Yes

19 Nomination and Remuneration Committee Yes

20 Stakeholders Relationship Committee Yes

21 Risk Management Committee NA

22 Vigil Mechanism Yes

23 Related Party Transactions Yes

24 Corporate Governance requirements with respect to subsidiary of

the Company

Yes

25 Obligations with respect to Independent Directors Yes

26 Obligations with respect to Directors and Senior Management Yes

27 Other Corporate Governance requirements Yes

46 (2) Website as applicable Yes

Means of CommunicationThe Annual and Quarterly Results are regularly published in Financial Express (Both in English and Gujarati), The News

Paper as per requirement of SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015 and are also been

displayed on our website viz. www.sanghviforge.com.

General Shareholder Information A. Annual General Meeting

Day and date of AGM : Tuesday, September 27, 2016

Venue : At Registered office of the Company at 244/6-7, G.I.D.C. Industrial Estate,

Waghodia-391760, Dist. Vadodara

B. Registered office : 244/6-7, G.I.D.C. Industrial Estate, Waghodia-391760, Dist. Vadodara

C. Book closure date : September 20, 2016 to September 27, 2016

D. Listing of Equity Shares : 1) National Stock Exchange of India Limited, Exchange Plaza, Bandra-Kurla Complex,

Bandra (East), Mumbai - 400 051

2) BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001

E. Stock Code : NSE :- SANGHVIFOR | BSE :- 533411

F. ISIN of NSDL and CDSLb : INE263L01013

G. Present Financial Year : April to March

H. Share transfer agent : Bigshare Services Private Ltd.

E-2/3, Ansa Industrial Estate, Sakivihar Road, Mumbai-400072 Phone No:+91 22 28470652,

Fax: +91 22 28475207 Email: [email protected]

I. Dematerlisationof shares : As on March 31, 2016, 14192283 shares were in dematerialized form representing 95.30%

of total shares.

J. Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion date and likely impact on equity : NA


H. Performance of equity shares during the FY 2015-16Monthly share price movement during the FY 2015-16 at BSE and NSE

Months BSE NSE

High Price (H) Low Price (H) Close Price (H) High Price (H) Low Price (H) Close Price (H)

April-15 69.20 50.30 57.85 70.90 50:35 57.25

May-15 68.15 51.05 60.20 67.75 51.85. 60.00

June-15 59.05 51.25 52.40 59.05 51.30 52.75

July-15 57.55 51.80 54.85 57.80 51.65 55.05

August-15 62.20 47.20 50.05 62.90. 47.45 50.10

September-15 49.05 44.20 44.35 49.75 44.15 44.81

October-15 50.90 42.85 47.25 50.50 43.45 46.35

November-15 57.55 45.65 57.45 57.50 45.95 57.15

December-15 50.65 51.25 56.20 59.25 51.80 55.60

January-16 62.90 48.55 51.35 62.80 48.20 51.40

February-16 54.10 40.01 42.00 55.10 40.25 43.10

March-16 45.40 37.65 41.10 44.95 39.50 41.35

I. Equity performance COMPANY vs SENSEX

COMPANY vs NIFTY

May 15

60%

40%

20%

0%

-20%

-40%

jul 15 Sep 15 Nov 15 Jan 16 Mar 16

COMPANY vs SENSEX

COMPANY SENSEX

May 15

60%

40%

20%

0%

-20%

-40%

jul 15 Sep 15 Nov 15 Jan 16 Mar 16

COMPANY vs NIFTY

COMPANY NIFTY



49

J. Shareholding Pattern as on March 31, 2016

Category No. of shareholders No. of shares

Total shareholders % of shareholder Total shares %

Clearing member 23 0.48 13,147 0.08

Corporate bodies 127 2.68 369,071 2.48

Non-Resident Indians 44 0.93 30,085 0.20

Overseas corporate bodies 2 0.04 6,99,981 4.70

Promoters 26 0.55 100,88,157 67.74

Public 4522 95.32 36,91,826 24.80

Total 4744 100 1,48,92,267 100

L. Distribution Of Shareholding As On March 31, 2016

Category No. of shareholders

% No. of shares %

1 500 3913 82.48 5,35,914 3.88

501 1000 348 7.34 2,85,565 2.06

1001 2000 190 4.01 2,92,493 2.11

2001 3000 87 1.83 2,19,410 1.58

3001 4000 29 0.61 1,03,840 0.75

4001 5000 31 0.65 1,44,859 1.00

5001 10000 70 1.48 5,26,004 3.79

10001 and above 76 1.60 1,17,84,182 84.83

TOTAL 4,744 100 1,48,92,267 100

K. Shareholding Pattern as on March 31, 2016

67.74%

4.70%2.48%

0.08%0.20%

24.80%

Corporate bodies

Clearing member

Non-Resident Indians

Overseas corporate bodies

Promoters

Public


M. Plant Location : Plant# 1

244/6-7, G.I.D.C. Industrial Estate, Waghodia, Dist: Vadodara-391760

Plan t# 2

1401, 1402, 1403, G.I.D.C. Industrial Estate, Waghodia, Dist: Vadodara-391760

N. Address for Correspondence:

The shareholders may address their communications/suggestions/grievance/queries to:

Shri Keval Thakkar

Company Secretary

Sanghvi Forging and Engineering Limited

244/6-7, G.I.D.C. Industrial Estate, Waghodia,Vadodara-391760

Email: [email protected]

Phone: 91-2668-673100 Fax: 91-2668-673135



51

Certificateto the Members of Sanghvi Forging and Engineering Limited

We have examined the compliance of the conditions of Corporate Governance by Sanghvi Forging and Engineering

Limited (hereinafter referred to as ‘the Company’) for the year ended 31st March, 2016 as stipulated in clause 49 of the

Listing Agreement of the said Company with the stock exchange in India and/or Securities Exchange Board of India (Listing

Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘Listing Regulations) as may be

applicable.

The compliance of conditions of Corporate Governance is the responsibility of the Company’s Management. Our examination

was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the

conditions of Governance. It is neither an audit nor an expression of an opinion on the financial statement of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company

has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement and/

or Listing Regulations as may have been applicable.

We state that in respect of investor grievances received during the year ended 31st March, 2016, no investor grievances

are pending against the Company, as per the records maintained by the Company and presented to the Stakeholders

Relationship Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency

or effectiveness with which the Management has conducted the affairs of the Company.



ACS # 9711, CP # 9927

Place: Vadodara

Date : May 25, 2016


CEO and CFO CertificationWe Jayanti B Sanghvi, Managing Director and Vikram B Sanghvi, Executive Director and CFO, responsible for the finance

function, certify that:

A. We have reviewed financial statements and the cash flow statement for the year ended March 31, 2016 and that to

the best of their knowledge and belief :

1. These statements do not contain any materially untrue statement or omit any material fact or contain statements

that might be misleading;

2. These statements together present a true and fair view of the company’s affairs and are in compliance with

existing accounting standards, applicable laws and regulations.

B. We further state that, to the best of their knowledge and belief, no transactions entered into by the company during

the year ended March 31, 2016 which was fraudulent, illegal or violative of the company’s code of conduct.

C. We accept responsibility for establishing and maintaining internal controls for financial reporting and that they have

evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have

disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of which such internal

controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

D. We have indicated to the auditors and the Audit committee:

1. Significant changes in internal control over financial reporting during the year ended March 31, 2016;

2. Significant changes in accounting policies during the year ended March 31, 2016 and that the same have been

disclosed in the notes to the financial statements; and

3. Instances of significant fraud of which we have become aware and the involvement therein, if any, of the

management or an employee having a significant role in the company’s internal control system over financial

reporting.


Place: Vadodara Jayanti B Sanghvi Vikram B SanghviDate : May 25, 2016 Managing Director Whole Time Director & CFO

Declaration on Compliance with the Code of ConductI, Babulal S Sanghvi, Chairman of Sanghvi Forging & Engineering Ltd hereby declare that all the Board members and Senior

managerial personnel have affirmed for the year ended March 31, 2016 compliance with the code of Conduct laid down

for them.


Babulal S. Sanghvi Place: Vadodara

Chairman Date : May 25, 2016



53

FINANCIAL STATEMENTS


Independent Auditor’s Report

Report on the Financial Statements We have audited the accompanying financial statements

of SANGHVI FORGING & ENGINEERING LIMITEDwhich

comprise the Balance sheet as at 31 March 2016 and the

Statement of Profit and Loss, the Cash flow Statement for

the year the ended and a summary of significant accounting

policies and other explanatory information.

Management’s Responsibility for the Financial Statements The Company’s Board of Directors is responsible for the

matters stated in section 134(5) of the companies Act,

2013(“the Act”) with respect to the preparation and

presentation of these standalone financial statements

of Companythat give a true and fair view of the financial

position and financial performance and cash flows of the

company in accordance with the Accounting principles

generally accepted in India, including accounting Standards

specified u/s 133 of the Act, read with Rule 7 of the

Companies (Accounts) Rules, 2014. This responsibility

includes maintenance of adequate accounting records in

accordance with the provision of the Act for safeguarding

the assets of the company 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 internal

financial controls, that were operating effectively for

ensuring the accuracy and completeness of the accounting

records, relevant to the preparation and presentation of

the financial statements that give a true and fair view and

are free from material misstatement, whether due to fraud

or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these

standalone financial statements based on our audit. We

have taken into account the provisions of the Act, the

accounting and auditing standards and matters which

are required to be included in the audit report under the

provisions of the act and the rules made there under.

We conducted our audit in accordance with the Standards on

Auditing specified u/s 143(10) of the Act. Those Standards

require that we comply with ethical requirements and plan

and perform the audit to obtain reasonable assurance

about whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit

evidence about the amounts and disclosures in the

financial statements. The procedures selected depend

on the auditor’s judgment, including the assessment

of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making

those risk assessments, the auditor considers internal

control relevant to the company’s preparation of the

financial statements that give true and fair view in order

to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an

opinion on whether the Companyhas in place an adequate

internal financial controls system over financial reporting

and the operating effectiveness of such controls. An audit

also includes evaluating the appropriateness of accounting

policies used and the reasonableness of the accounting

estimates made by management, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit

opinion on the standalone financial statements.

OpinionIn our opinion and to the best of our information and

according to the explanations given to us, the financial

statements give the information required by the Act

in the manner so required and give a true and fair view

in conformity with the accounting principles generally

accepted in India:

(i) in the case of the balance sheet, of the state of affairs

of the company as at 31 March 2016;

(ii) in the case of the statement of profit and loss, of the

Loss for the year ended on that date;

To the Members of

SANGHVI FORGING & ENGINEERING LIMITED



55

(iii) in the case of the Cash Flow Statement, of the cash

flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report)

Order, 2016 (“the Order”) issued by the Central

Government of India in terms of sub-section (11) of

section 143 of the Act, we give in the “Annexure A” a

statement on the matters specified in paragraphs 3

and 4 of the Order.

2. As required by section 143(3) of the Act, we report

that:

a. We have obtained all the information and

explanations which to the best of our knowledge

and belief were necessary for the purpose of our

audit;

b. In our opinion proper books of account as required

by law have been kept by the company so far as

appears from our examination of those books;

c. The Balance Sheet ,Statement of Profit and Loss

and cash flow statement dealt with by this Report

are in agreement with the books of account;

d. In our opinion, the Balance Sheet and Statement

of Profit and Loss comply with the Accounting

Standards referred to in section 133the Act,

read with rule 7 of the Companies (Accounts)

Rules,2014

e. On the basis of written representations received

from the directors as on 31 March 2016, and taken

on record by the Board of Directors, none of the

directors is disqualified as on 31 March 2016, from

being appointed as a director in terms of section

164(2) of the Act.

f. With respect to the adequacy of the internal

financial controls over financial reporting of the

Company and the operating effectiveness of such

controls, refer to our separate report in “Annexure

B”; and

g. With respect to the matter to be included in the

Auditor’s report in accordance with Rule 11 of the

Companies (Audit and Auditors) Rules,2014, in our

opinion and to the best of our information and

according to the explanations given to us:

i. The Company has disclosed the impact of

pending litigations on its financial position

in Note 2.25(1A) of the standalone financial

statements.

ii. The Company did not have any long term

contracts including derivatives contracts for

which there were an material foreseeable

losses;

iii. There is no such amount which is required

to be transferto the Investor education

and protection fund in accordance with the

relevant provisions of the Companies Act,

1956 and rules madethere under.

For Shah & BhandariChartered Accountants

FirmNo.: 118852W

Yogesh BhandariPlace : Vadodara Partner

Date : May 25, 2016 M.No.046255


“Annexure A” to the Auditor’s Report

i. (a) The Company has maintained proper records

showing full particulars, including quantitative

details and situation of its fixed assets.

(b) As explained to us, fixed assets are physically

verified by the management according to a

phased programme designed to cover all items

over a period of three year, which in our opinion,

is reasonable, looking to the size of the company

and its nature of business, and no material

discrepancies were noticed on such verification.

(c) According to the information and explanations

given to us and on the basis of our examination

of the records of the Company, the title deeds of

immovable properties are held in the name of the

company.

ii. (a) As explained to us, Inventories has been physically

verified during the year and at the year-end.

(b) In our opinion the procedures of physical

verification of inventory followed by the

management are reasonable and adequate in

relation to the size of the Company and the nature

of its business.

(c ) The Company is maintaining proper records

of inventory. In our opinion and according to

information given to us no major discrepancies

noticed on physical verification of stocks as

compared to book records .

iii. The Company has granted interest free unsecured

loan to company covered in the register maintained

under section 189 of the Act.

(a) As information given to us, the terms and

conditions of grant of such loans is not prejudicial

to the interest of the company.

(b) As information given to us, there is no stipulation

of repayment of loan.

(c) Since there is no stipulation of repayment of loan,

clause of the Order is not applicable.

iv. In our opinion and according to the information and

explanations given to us, the Company has not given

any Loans nor made any investments under the

provisions of section 185 and 186 of the Act.

v. The Company has not accepted any deposits during the

year from the public within the meaning of sections 73

& 74 of the Act and the rules framed there under to

the extent notified.

vi. We have broadly reviewed the cost records maintained

by the Company pursuant to Rules prescribed by

the Central Government under Section 148(1) of

the Act and are of the opinion that, prima-facie, the

prescribed cost records have been maintained and

are being made up. We have, however, not made a

detailed examination of the cost records with a view

to determine whether they are accurate or complete.

vii. (a) According to the information and explanations

given to us ,the company is generally regular in

depositing undisputed statutory dues including

provident fund, employees’ state insurance,

income-tax, sales-tax, , service tax, duty of

customs, duty of excise, value added tax or cess

dues with the appropriate authorities. There are

no undisputed amounts payable as at 31.03.2016

for a period of more than six months from the

date they became payable.



57

(b) According to the information and explanation given to us, there are no dues of income-tax, sales-tax, service tax,

duty of customs, duty of excise, value added tax or cess dues under dispute as on 31st March 2016 except Income

Tax, Service Tax and Excise Duty dues:

Name of Statue Nature of Dues Amount (J 000)

Period to which it relates (F.Y.)

Forum where the dispute is pending

Income Tax Act, 1961 Income Tax 282.61

5000.00

2012-13 to

2013-14

ITAT, Ahmedabad

Central Excise Act, 1944 Service Tax 1955.60 2007-08 to

2011-12

CESTAT Ahmedabad

Central Excise Act, 1944 Service Tax 7653.06 2007-08 to

2013-14

Asst. Commissioner of

Central Excise, Custom &

Service Tax Vadodara

Central Excise Act, 1944 Excise 2979.31 2011-12 to

2014-15

Additional Commissioner

of Central Excise , Custom

& Service Tax Vadodara

Central Sales Tax Act, 1956 Sales Tax 7104.84 2010-11 to

2011-12

Asst. CCT (Appeal)

viii. Based on our audit procedures and on the information

and explanation given to us by management, the

company has defaulted in repayment of its loan and

interest to the banks. Estimated unpaid overdue

instalments and interest to banks as at March 31,

2016 aggregated to C2,82,96,000/- & interest there on

C2,51,00,000/- since January 2016 (P.Y. C1,11,18,000 &

Interest thereon of C17,67,000/- since February 2015).

ix. According to the information and explanations given

to us , the term loan was applied for the purpose for

which they were obtained.

x. During the course of our examination of the books and

records of the Company, carried out in accordance with

the generally accepted auditing practices in India, and

according to the information and explanations given

to us, we have neither come across any instance of

material fraud by the Company or on the Company by

its officers or employees, noticed or reported during

the year, nor have we been informed of any such case

by the Management.

xi. In our opinion and according to the information and

explanations given to us, the managerial remuneration

has been paid or provided in accordance with the

requisite approvals mandated by the provisions of

Section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and

explanations given to us, the Company is not of a nidhi

company. Accordingly, paragraph 3(xii) of the Order is

not applicable.

xiii. In our opinion and according to the information and

explanations given to us, the company has entered

into transactions with related parties in compliance

with Section 188 and 177 of Companies Act, 2013

where applicable and the details of such related party

transactions have been disclosed in the financial

statement as required by relevant Accounting

Standards (AS) 18, Related Party Disclosures specified

under Section 133 of the Act, read with Rule 7 of the

Companies (Accounts) Rules,2014.

xiv. According to the information and explanations

given to us, The Company does not have made any

preferential allotment or private placement of shares

or fully or partly convertible debentures during the

year. Accordingly, paragraph 3(xiv) of the Order is not

applicable.

xv. According to the information and explanations given

to us and based on our examination of the records of

the Company, the Company has not entered into non-

cash transactions with directors or persons connected

with him. Accordingly, paragraph 3(xv) of the Order is

not applicable.

xvi. The Company is not required to be registered under

section 45-IA of the Reserve Bank of India Act 1934.

Accordingly, the provisions of Clause 3(xvi) of the

Order are not applicable to the Company.


FRN: 118852W

Yogesh BhandariPlace: Vadodara Partner

Date: May 25, 2016 M.No.:046255


“Annexure B” to the Auditor’s Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over

financial reporting of SANGHVI FORGING & ENGINEERING

LIMITED as of 31 March 2016 in conjunction with our audit

of the standalone financial statements of the Company for

the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing

and maintaining internal financial controls 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 on Audit of

Internal Financial Controls over Financial Reporting 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 its business, including adherence

to 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 Companies Act, 2013.

Auditors’ ResponsibilityOur responsibility is to express an opinion on the internal

financial controls over financial reporting based on our

audit. We conducted our audit in accordance with the

Guidance Note on Audit of Internal Financial Controls

over Financial Reporting (the “Guidance Note”) and the

Standards on Auditing, issued by ICAI and deemed to be

prescribed under section 143(10) of the Companies Act,

2013, to the extent applicable to an audit of internal

financial controls, both applicable to an audit of Internal

Financial Controls and, both issued by the Institute of

Chartered Accountants of India. Those Standards and

the Guidance Note require that we comply with ethical

requirements and plan and perform the audit to obtain

reasonable assurance about whether adequate internal

financial controls over financial reporting was established

and maintained and if such controls operated effectively in

all material respects.

Our audit involves performing procedures to obtain audit

evidence about the adequacy of the internal financial

controls system over financial reporting and their

operating effectiveness. Our audit of internal financial

controls over financial reporting included obtaining an

understanding of internal financial controls over financial

reporting, 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

judgment, including the assessment of the risks of material

misstatement of the financial statements, whether due to

fraud or error.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit

opinion on the internal financial controls system over

financial reporting.

Meaning of Internal Financial Controls over Financial ReportingA company’s internal financial control over financial reporting

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 internal financial control over financial reporting

includes those policies and procedures that

(1) pertain to the maintenance of records that, in

reasonable detail, accurately and fairly reflect the

transactions and dispositions of the assets of the

company;

(2) provide reasonable assurance that transactions are

recorded as necessary to permit preparation of

financial statements in accordance with generally

accepted accounting principles, and that receipts and

expenditures of the company are being made only in

accordance with authorisations of management and

directors of the company; and

(3) 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.



59

Inherent Limitations of Internal Financial Controls Over Financial ReportingBecause of the inherent limitations of internal financial

controls over financial reporting, including the possibility

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 over financial reporting

to future periods are subject to the risk that the internal

financial control over financial reporting may become

inadequate because of changes in conditions, or that the

degree of compliance with the policies or procedures may

deteriorate.

OpinionIn our opinion, the Company has, in all material respects,

an adequate internal financial controls system over

financial reporting and such internal financial controls

over financial reporting were operating effectively as at 31

March 2016, 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 on Audit of Internal Financial Controls Over

Financial Reporting issued by the Institute of Chartered

Accountants of India.

For Shah & Bhandari Chartered Accountants

Firm No.: 118852W


Date: 25th May, 2016 M.No.046255


(H in ‘000)

Sr. Particulars Note No. As at March 31, 2016

As at March 31, 2015

I. EQUITY AND LIABILITIES

(1) Shareholders' Funds :

(a) Share Capital 2.1 148,922.67 138,922.67

(b) Reserves and Surplus 2.2 290,988.95 355,859.09

(c) Money received against share warrants 2.3 0.00 11,250.00

(2) Non-Current Liabilities:

(a) Long-Term Borrowings 2.4 879,403.68 940,890.10

(3) Current Liabilities:

(a) Short - Term Borrowings 2.5 265,737.51 269,936.66

(b) Trade Payables 2.6

- Trade Payables for Goods & Services 164,376.64 181,987.76

- Trade Payables for Micro,Small and Medium Enterprises 2,849.23 83.53

(c) Other Current Liabilities 2.7 230,989.17 235,995.36

(d) Short - Term Provisions 2.8 18,628.92 12,618.53

Total 2,001,896.77 2,147,543.70

II. ASSETS

(1) Non - Current Assets:

(a) Fixed Assets 2.9

(i) Tangible Assets 1,560,889.42 1,502,358.32

(ii) Intangible Assets 2,984.16 3,497.33

(iii) Capital Work-in-Progress 4,457.76 101,733.89

(b) Non - Current Investment 2.10 6.75 6.75

(c) Deferred Tax Assets (Net) 2.11 0.00 0.00

(d) Long Term Loans and Advances 2.12 15,392.56 10,247.27

(2) Current Assets:

(a) Inventories 2.13 219,574.62 198,067.58

(b) Trade Receivables 2.14 141,011.57 256,900.82

(c) Cash and Bank Balances 2.15 10,963.43 24,261.93

(d) Short - Term Loan and Advances 2.16 41,823.71 46,878.26

(e) Other Current Assets 2.17 4,792.79 3,591.54

Total 2,001,896.77 2,147,543.70

SIGNIFICANT ACCOUNTING POLICIES 1

See accompanying Notes to the Financial Statements 2.25

Balance Sheet As at March 31, 2016

As per our report of even date

For Shah & Bhandari For and on behalf of Board of Directors Chartered Accountants FRN No 118852W

Yogesh Bhandari Babulal Sanghvi Jayantilal Sanghvi Partner Chairman Managing DirectorMembership No - 046255

Vikram Sanghvi Keval ThakkarVadodara, dated May 25, 2016 Whole Time Director & Chief Financial Officer Company Secretary



61





(H in ‘000)

Sr. Particulars NoteNo.

Year endedMarch 31, 2016


I. INCOME :

(a) Revenue from Operations 2.18 728,002.17 941,751.82

Less : Excise Duty (44,472.30) (70,429.12)

Net Revenue from Operations 683,529.87 871,322.70

(b) Other Income 2.19 9,517.74 2,438.06

Total Revenue 693,047.61 873,760.76

II. EXPENSES

(a) Cost of Material Consumed 2.20 329,040.72 466,853.01

(b) Changes in Inventory of Finished Goods and Work in

Progress

2.21 (35,716.87) (38,711.73)

(c) Employee Benefits Expense 2.22 63,866.26 49,920.12

(d) Finance Costs 2.23 161,832.24 158,493.13

(e) Depreciation and Amortization Expense 2.9 84,202.39 83,524.49

(f) Other Expenses 2.24 189,188.51 233,165.91

792,413.24 953,244.93

III. PROFIT/(LOSS) BEFORE TAX (99,365.64) (79,484.17)

TAX EXPENSES

- Current Tax 0.00 0.00

- Deferred Tax ( Refer Note 2.11) 0.00 0.00

- (Excess) / Short Provision for tax relating to prior years 504.50 (13.89)

504.50 (13.89)

IV. PROFIT/(LOSS) FOR THE YEAR (99,870.14) (79,470.28)

Basic Earning Per Share(Face Value of H 10 Per Share) (7.10) (5.85)

Diluted Earning Per Share(Face Value of H 10 Per Share) (6.71) (5.34)

[Refer to Note No. 2.25 (8)]



Statement of Profit and Loss For the year ended March 31, 2016


(H in ‘000)

Particulars Year endedMarch 31, 2016


A. Cash Flow From Operating Activities:

Net Profit Before Tax and Extra ordinary Items (99365.64) (79484.17)

Adjustment for:

Depreciation /Amortization /Impairment 84202.39 83524.49

Interest Expense / Finance Cost 143505.02 119368.35

Interest Income (1538.08) (2010.07)

Loss/ (Profit) on sale of Fixed Assets 28.78 (7.66)

Operating Profit Before Working Capital Changes 126832.47 121390.94

Adjustment for (increase)/decrease in Operating assets:

Inventories (21507.05) (45288.64)

Trade Receivables 115889.25 (139408.13)

Short Term Loan & Advances 5054.55 7041.45

Other Current Assets (1201.25) (2839.57)

Long Term Loan & Advances (5145.30) (1587.53)

93090.20 (182082.42)

Adjustment for (increase)/decrease in Operating liabilities:

Trade Payable (14845.42) 51051.05

Non-Current Liabilities 0.00 (23565.15)

Other Current Liabilities (5006.19) (359289.96)

Short Term Provisions 6010.39 4699.53

(13841.22) (327104.53)

Cash Generated From Operation 206081.46 (387796.01)

Income Tax Expense 504.50 (13.89)

Net Cash Generated From Operating Activities 205576.96 (387782.12)

B. Cash Flow From Investing Activities

Acquisition of Fixed Assets (45355.95) (63288.21)

Sales / Devaluation of Assets 0.00 23514.55

Proceed from Sale of Fixed Assets 383.00 30.48

Change in Bank Margin Money / FD Originally Matured in more than

three months 12870.18 (3104.59)

Interest Received 1538.08 2010.07

Net Cash Used in Investing Activities (30564.69) (40837.70)

Cash Flow Statement For the year ended March 31, 2016



63

(H in ‘000)



C. Cash Flow From Financing Activities

Increase in Share Capital 10000.00 6000.00

Security Premium 23750.00 22125.00

Non - Current Investment 0.00 (6.75)

Long Term Loan from Bank (61486.42) 533704.54

(Repayments)/ Short Term Borrowing from Bank (4199.15) (13538.56)

Finance Cost (Interest & Bank Charges) (143505.02) (119368.35)

Net Cash used in Financing Activities (175440.59) 428915.88

Net Increase /(Decrease)in Cash and Bank Balance ( A+B+C) (428.33) 296.06

Opening Balance of Cash & Cash Equivalent 1347.99 1051.93

Closing Balance Cash & Cash Equivalent # 919.66 1347.99

# Comprises of,

Cash on Hand 773.85 727.61

Balance with Bank -Current Accounts 145.81 620.38

919.66 1347.99

Cash Flow Statement For the year ended March 31, 2016






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, defense, ship building, power & other sectors.

It also exports products to various foreign countries over

the last two decades.

The Company is having capacity of 18600 MTPA which

includes 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.

1. SIGNIFICANT ACCOUNTING POLICIES TO FINANCIAL STATEMENTS

I. Basis for preparation of financial accounting The financial statement of the Company have

been prepared in accordance with the Generally

Accepted Accounting Principles in India (Indian

GAAP) to comply with the Accounting Standards

specified under Section 133 of the Companies

Act, 2013, read with Rule 7 of the Companies

(Accounts) Rules, 2014 and the relevant

provision of the Companies Act, 2013 (“the 2013

Act’)/Companies Act, 1956 (“the 1956 Act”), as

applicable.

These Financial statements are prepared under

historical cost conventions on accrual.

II. Use of Estimates The presentation of financial statements in

conformity with Indian GAAP, which requires the

Management to make estimates and assumptions

considered in the reported amounts of assets and

liabilities on the date of financial statements and

the reported amount of revenues and expenses

during the year. Difference between the actual

result and estimates are recognised in the period

in which reason are known / materialized.

III. Fixed Assets and Depreciation /Amortization A. Tangible Assets Tangible Fixed Assets are stated at historical

cost including borrowing costs expenditure

directly attributable to the acquisition of the

asset and fluctuation arising from exchange

rate variations attributable to the assets

less accumulated depreciation there on and

impairment losses if any. Leasehold land

having lease of 99 years or more are treated

as free hold land only and other leases are

amortized over the period of lease.

Subsequent expenditure related to an item

of tangible assets are added to its book value

only if they increase the future benefits from

the existing assets beyond its previously

assessed standard of performance.

B. Intangible Assets Intangible assets are stated at acquisition

cost, net of accumulated amortization and

accumulated impairment losses, if any.

Intangible assets are amortised on a straight

line basis over their estimated useful lives.

C. Capital Work in Progress Cost of fixed assets not ready for use before

the balance sheet date is disclosed as capital

work in progress.

Notes Annexed to and forming part of the Financial Statements As on March 31, 2016

Depreciation: The depreciation during the year has been provided on straight line basis as per Schedule II of the Companies act, 2013

using useful life of assets listed as under:

Particulars Useful Life

Leasehold Land 20

Building (Factory) 30

Building (Residential) 60

Building (Fences, Wells, etc) 5

Road 5 to 10

Plant and Machinery 15

Plant and Machinery (Heavy Forging Process Machinery) 20 to 25*

Electrically Operated Vehicles 8

Electrical Installations 10



65


Particulars Useful Life

Laboratory Equipment 10

Windmill 22

Computers, Server & Networking Device 3

Furniture 10

Office equipment 5

Vehicles - Four Wheeler 8

Vehicles - Two Wheeler 10

*Based on an internal technical evaluation made by the company and on past experience , estimated useful life of

Plant and machinery listed above best represent the period over which the management expects to use these assets.

However the useful lives for these asset is different from that prescribed in schedule II of the Act.

IV. Inventories Cost of Inventories have been computed

to include all cost of Purchases, Cost of

Conversion and other costs incurred in bringing

the inventories to their present location and

condition.

Inventories are valued at lower of cost or net

realizable value using the First in First out (FIFO)

basis.

V. Revenue Recognition 1. Sales of products and services are recognised

when risk and rewards of ownership at

of the products are passed on to the

customers, which is generally on dispatch

of goods. Sales are inclusive of Excise Duty

but excluding sales tax / Value Added Tax

and export incentives. Interest incomes are

recognised on time proportion basis.

2. Revenue from sale of power is recognised

when delivered and measured based

on rates as per bilateral contractual

agreements with buyers / at rate arrived at

based on the principles laid down under the

relevant Tariff Regulations as notified by the

regulatory bodies, as applicable.

3. Export incentives are accounted on

accrual basis. Revenue from job charges is

recognised completion of job work.

VI. Cash flow statement Cash flows are reported using the indirect

method whereby profit before tax is adjusted

for the effects of the transactions of a non cash

nature and any deferrals or accruals of past or

future cash receipts or payments. The cash flows

from regular revenue generating; financing

and investing activities of the company are

segregated.

VII. Leases Rentals applicable to operating leases where

substantially all of the benefits and risks of

ownership remain with the lessor are charged

against profits on straight line basis over the

lease period.

VIII. Foreign Currency Transactions (a) Transactions denominated in foreign

currencies are recorded at the rate prevailing

on date of transaction

(b) In respect of monetary items denominated

in foreign currency at the year-end are

translated at the year-end rates.

(c) Any income or expenses on account of

exchange differences either on settlement

or on transactions are recognised in the

Profit and Loss Account.

(d) Exchange difference relating to long term

foreign currency monetary item to the

extent they are used for financing the

acquisition of fixed assets are adjusted from

the cost of such fixed assets.

(e) Financial statements of foreign operations

are treated as integral operations and

translated for Assets and liabilities at rates

prevailing at the end of the year and Net

revenues at the average rate for the year.


(f) Exchange differences arising on such

translation are recognised as income or

expense of the period in which they arise.

(g) Forward contracts, other than those

entered into to hedge foreign currency

risk on unexecuted firm commitments or

highly probable forecast transactions, are

treated as foreign currency transactions and

accounted accordingly as per Accounting

Standard (AS) 11 The Effects of Changes

in Foreign Exchange Rates. Exchange

differences arising on such contracts are

recognised in the period in which they arise.

IX. Taxes on Income Provision for taxation comprises of Current Tax

and Deferred Tax .Current tax provision has been

made after considering reliefs and deduction

available under Income Tax Act, 1961. Deferred

tax resulting from “timing differences” between

taxable and accounting income is accounted for

using the tax rates and laws that are enacted or

substantively enacted as on the balance sheet

date. The deferred tax assets is recognised and

carried forward only to the extent the assets

can be realized in future. However, where there

is unabsorbed depreciation or carry forward

losses under taxation laws, deferred tax assets

are recognised only if there is virtual certainty

of realization of such assets. Deferred tax assets

are reviewed as at each Balance sheet date.

Minimum Alternate Tax (MAT) Credit: MAT credit

is recognised, as an Asset only when and to the

extent there is convincing evidence that the

Company will pay normal income tax during the

specified year. In the year in which the Minimum

Alternative tax (MAT) credit becomes eligible to

be recognised as an asset in accordance with the

recommendation contained in Guidance Note

issued by the Institute of Chartered Accountants

of India, the said asset is created by way of a

credit to the statement of profit and loss and

shown as MAT Credit Entitlement. The Company

reviews the same at each balance sheet date and

writes down the carrying amount of MAT Credit

Entitlement to the extent there is no longer

convincing evidence to the effect that Company

will pay normal Income Tax during the specified

period.

X. Employee Benefits (a) The Company’s contribution in respect of

provident fund is charged to Profit and Loss

Account each year on accrual basis.

(b) Short term compensated absences are

provided based on past experience.

(c) With respect to gratuity liability, Company

contributes to Life Insurance Corporation

of India (LIC) under LIC’s Group Gratuity

policy. Gratuity liability as determined on

actuarial basis by the independent valuer.

Actuarial gain/loss is charged to Profit and

Loss Account.

XI. Borrowing Costs (a) Borrowing Cost attributable to acquisition

and construction of qualifying assets are

capitalized as part of the cost of such assets

up to the date when such assets are ready

for intended use.

(b) Other borrowing cost is charged to Profit

and Loss Account.

XII. Provisions, Contingent Liabilities and Contingent Assets

Provision is recognised only when there is a

present obligation as a result of past events and

when reliable estimates of the amount of the

obligation can be made. Contingent liability is

disclosed for:-

(a) Possible Obligations which will be confirmed

only by future events not wholly within the

control of the company or

(b) Present obligations arising from past events

where it is not probable that an outflow

of resources will be required to settle the

obligation or reliable estimates of the

amount of the obligation cannot be made.

Contingent Assets are not recognised in the

financial statements since this may result in

the recognition of income that may never be

realized.




67


XIII. Impairment of Assets The Company assesses at each Balance Sheet

date whether there is any indication that an

asset may be impaired. If any such indication

exists, the Company estimates the recoverable

amount of the asset. If such recoverable amount

of the asset or the recoverable amount of the

cash generating unit to which the asset belongs

is less than its carrying amount, the carrying

amount is reduced to its recoverable amount.

The reduction is treated as an impairment loss

and is recognised in the Profit and Loss Account.

If at the Balance Sheet date there is an indication

that if a previously assessed impairment loss

no longer exists, the recoverable amount is

reassessed and the asset is reflected at the

recoverable amount.

XIV. Application of Securities Premium Account Share issue expenses are charged first against

available balance in Securities Premium Account.

XV. Earning Per Share The Company reports basic and diluted earnings

per share in accordance with the Accounting

Standard – 20- ‘Earning per Share’ prescribed by

the Companies (Accounting Standard) Rules 2006.

Basic Earning per Share is computed by dividing

the net profit or loss for the year by the weighted

average number of Equity Share outstanding

during the year. Diluted earning per share is

computed by dividing the net profit or loss for

the year by the weighted number of equity shares

outstanding during the year as adjusted for the

effects of all dilutive potential equity share.

XVI. Investments Current Investments are carried at lower of

cost and Market Value. Non Current (Long

Term) investments are stated at cost. Provision

for diminution in the value of Non Current

investments is made only if such a decline is

other than temporary.

XVII. Government Grant: Grant from the government are recognized

when there is reasonable assurance that;

I. The Company will comply with the conditions

attached to them and

II. The grant will be received.

Government grants related to revenue are

recognized on systematic basis in the statement

of profit and loss over the periods necessary to

match them with the related costs which they

are intended to compensate. Such grants are

deducted in reporting the related expenses.

When company receives non-monetary grants,

the asset is accounted for on the basis of its

acquisition cost. In case non-monetary asset is

given free of cost it is recognized at a nominal

value.


Notes forming part of Balance Sheet As on March 31, 2016

Particulars As at March 31, 2016 As at March 31, 2015

Nos. (J in 000) Nos. (J in 000)

Equity Shares

At the beginning of the year 13892267 138922.67 13292267 132922.67

Issued during the year

(a) Preferential Issue by conversion of

warrant

1000000 10000.00 600000 6000.00

Outstanding at the end of the year 14892267 148922.67 13892267 138922.67

Sr. Name of the Shareholder As at March 31, 2016 As at March 31, 2015

Number of shares

% holding Number of shares

% holding

1 Shri Jayantilal B. Sanghvi 1,925,591 12.93 1,675,591 12.06

2 Shri Babulal S. Sanghvi 1,714,283 11.51 1,464,283 10.54

3 Shri Naresh B. Sanghvi 1,832,931 12.31 1,582,931 11.39

4 Shri Vikram B. Sanghvi 1,505,682 10.11 1,255,682 9.04

5 M/s. Dango & Dienenthal GMBH & Co. 699,981 4.70 699,981 5.04

Total 7678468 51.56 6678468 48.07

(ii) Reconciliation of shares outstanding at the beginning and at the end of the year

(iii) Details of shares held by each shareholder holding more than 5% share in the company (Equity Shares of H 10 each fully paid)

(H in ‘000)

Sr. Particulars As at March 31, 2016


(a) AUTHORISED :

20,000,000 No. of Equity Shares Of H10 each 200,000.00 200,000.00

(b) Issued , Subscribed & Paid up Share Capital :

1,48,92,267 No. of Equity Shares of H10 Each

(P.Y. 1,38,92,267 No. of Equity Shares of H10 Each)

148,922.67 138,922.67

Total 148,922.67 138,922.67

2.1 SHARE CAPITAL

(i) 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 Register of Members of the Company shall enjoy the same voting

right and be subject to the same liabilities as all other shareholders of the same class.



69


(H in ‘000)



(a) General Reserve 3,987.14 3,987.14

(At Commencement & At End)

(b) Securities Premium

Opening Balance 369,967.97 353,467.97

Add : Premium of Shares Issued during the year 35,000.00 16,500.00

Closing Balance 404,967.97 369,967.97

(c ) Profit & Loss Account

Opening Balance (18,096.02) 62,387.64

Less : Transitional Adjustment on Depreciation 0.00 1,013.38

Add : Profit/(Loss) for the Year (99,870.14) (79,470.28)

Closing Balance (117,966.16) (18,096.02)

Total 290,988.95 355,859.09

2.2 RESERVES & SURPLUS

(H in ‘000)



(a) Share Warrant Application Money 0.00 11,250.00

(FY 2014-15 :25% application money received against 10,00,000

warrants allotted to promoters under preferential allotment which is

converted in to Equity Shares @ H45 per share (including premium of

H35 per share), as per SEBI(ICDR) Regulations, on 25th January, 2016)

Total 0.00 11,250.00

(H in ‘000)



(a) Secured Loans

(i) Term Loan from Banks

(Secured against all fixed assets (existing & proposed) and

Equitable Mortgage over Leasehold Land) [Refer Note 2.25(14)]

772,147.86 882,868.37

(b) Unsecured Loans

(i) Loans & Advances from Related Parties 86,555.82 55,021.73

(ii) From Inter Corporate Deposits [Refer Note 2.25(15)] 20,700.00 3000.00

Total 879,403.68 940,890.10

2.3 MONEY RECEIVED AGAINST SHARE WARRANTS

2.4 LONG TERM BORROWINGS



(H in ‘000)



(a) Current Maturity of long term Loan

(Secured against all fixed assets (existing & proposed) and Equitable

Mortgage over Leasehold Land. Personal Guarantees of Directors

including pledge of their shares)

[Terms of Loan : Refer Notes 2.25 (14)]

126,440.00 90,185.00

(b) Term Loan Intallment due (unpaid) 28,296.00 11,117.75

(c) Interest Accrued and Due on Borrowing 25,100.00 1,767.25

(d) Advance from Customers 8,792.37 22,972.57

(e) Duties & Taxes Payable 2,429.49 1,493.27

(f) Payable - For Capital Goods 39,854.31 108,189.37

(g) Other Outstanding Liabilities 77.00 270.15

Total 230,989.17 235,995.36

2.7 OTHER CURRENT LIABILITIES

(H in ‘000)



(a) For Employee Benefit Expenses 1,455.00 1,014.87

(b) For Other Expenses 17,173.92 11,603.66

Total 18,628.92 12,618.53

2.8 SHORT TERM PROVISIONS

(H in ‘000)



(a) Trade Payable - For Goods & Services 164,376.64 181,987.76

(b) Trade Payable - For Micro, Small & Medium Enterprises 2,849.23 83.53

Total 167,225.87 182,071.29

2.6 TRADE PAYABLES

(H in ‘000)



(a) Secured Loans

(i) Working Capital Loan from Banks

(Against Hypothecation of Entire Current Assets - Stock of Raw

Material, Work-in-Progress, Finished Goods, Stores & Spares, Trade

Receivables, etc.) (Rate of Interest is 12.20% to 13.25%).

265,737.51 269,936.66

Total 265,737.51 269,936.66

2.5 SHORT TERM B0RROWINGS



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(H in ‘000)

Particulars As at March 31, 2016


Investment in Subsidiary (Unquoted Investment)In shares of Sanghvi Europe B V (Having 100 Shares of Face Value of Euro 1

each fully paid)

6.75 6.75

Total 6.75 6.75

(H in ‘000)



(a) Deferred Tax Liability

On account of timing difference of

- Depreciation (148,121.20) (116,997.14)

(b) Deferred Tax Assets

On account of timing difference of

- On account of Expenses Allowable on Payment Basis 481.02 329 .32

- Unabsorbed Business Loss & Depreciation 147,640 .18 116,668.82

(The recognition of deferred tax assets on unabsorbed depreciation has

been restricted to the extent of deferred tax iability on account of timing

difference in respect of depreciation, the reversal of which is virtually certain.)

Total 0.00 0.00

(H in ‘000)



Unsecured, Considered Good(a) Capital Advances 4,609.46 0.00

(b) Security Deposits 1,271.43 1,513.21

(c) Loan to Subsidiary 0.00 84.73

(d) Balance with Revenue Authorities 9,438.05 8,488.01

(e) Other Loans & Advances # 73.62 161.32

# Includes primarily Gratuity Payable (Dr. Bal) etc.

Total 15,392.56 10,247.27

(H in ‘000)



(a) Raw Materials 49,593.20 65,038.18

(b) Work-in-Progress 150,249.94 114,136.76

(c) Stores & Spare Parts 8,521.70 6,985.98

(d) Packing Materials 59.17 359.74

(e) Scrap 11,150.61 11,546.92

(For mode of valuation of inventories, refer note no. 1(IV )

Total 219,574.62 198,067.58

2.10 NON - CURRENT INVESTMENTS

2.11 DEFFERED TAX Assets (Net)

2.12 LONG TERM LOANS & ADVNACES

2.13 INVENTORIES




73

(H in ‘000)



Cash & Cash Equivalents

(a) Cash on Hand 773.85 727.61

(b) Balance with Banks :

In Current Accounts 145.81 620.38

Othre Bank Balances

(a) Bank deposits with original maturity of more than 3 months but less

than 12 months held as margin money.

10,043.76 22,913.94

Total 10,963.42 24,261.93

(H in ‘000)



Unsecured, Considered Good

(a) Balance with Revenue Authorities 36,065.65 40,730.67

(b) Pre - Paid Expenses 838.30 4,422.24

(c) Advance to Suppliers 4,919.75 1,725.35

Total 41,823.70 46,878.26

(H in ‘000)



(a) Export Incentive Recivables 4,340.86 1,145.26

(b) Accrued Interest on Deposits 276.22 886.77

(c) Other Receivables 175.71 1,559.51

Total 4,792.79 3,591.54

(H in ‘000)




(a) Trade receivables outstanding for a period exceeding six months from

the date they are due for payment

26955.14 27639.79

(b) Trade receivables outstanding for a period less than six months from


114,056.43 229,261.03

Total 141,011.57 256,900.82

2.15 CASH & BANK BALANCES

2.16 SHORT TERM LOANS & ADVANCES

2.17 OTHER CURRENT ASSETS

2.14 TRADE RECEIVABLES



Notes forming part of Statement of Profit and Loss As on March 31, 2016

(H in ‘000)



(a) Sale of Flanges, Fittings, Forged Bars & Scrap(i) Finished Goods

Sales - Domestic 455,559.11 688,978.78

Sales - Export 199,291.42 154,120.96

Total 654,850.53 843,099.74

(ii) Manufacturing Scrap 58,244.76 87,772.97

713,095.29 930,872.71 (b) Other Operating Revenues

Export Incentives 5,961.57 1,518.62

Power Generation 2,689.05 2,623.81

Other Operating Revenues 6,256.26 6,736.68

14,906.88 10,879.11 Gross Revenue From Operations 728,002.17 941,751.82 Less : Excise Duty (44,472.30) (70,429.12)

Net Revenue From Operations 683,529.87 871,322.70

(H in ‘000)



Interest From Banks & Others 1,538.08 2,010.07

Exchange Fluctuation gain (Net) 2,725.65 0.00

Misc. Income 5,254.01 427.99

Total 9,517.74 2,438.06

(H in ‘000)



Steel ConsumedOpening Balance 65,038.18 58,606.00

Add : Purchase 313,595.74 473,285.19

378,633.92 531,891.18 Less : Closing Stock 49,593.20 65,038.18

Raw Material Consumed 329,040.72 466,853.01 INFORMATION RELATING TO CONSUMPTION OF MATERIALConsumption of Imported & Indigenous MaterialsImported Items 7,181.46 15,776.71

2.18% 3.38%

Indigenous Items 321,859.26 451,076.29

97.82% 96.62%

Total 329,040.72 466,853.01

2.18 REVENUE FROM OPERATIONS

2.19 OTHER INCOME

2.20 COST OF MATERIAL CONSUMED



75


(H in ‘000)



(Increase) / Decrease inClosing Stock:

Work - in - Progress 150,249.94 114,136.76

Scrap 11,150.61 11,546.92

161,400.55 125,683.67 Opening Stock:Work - in - Progress 114,136.76 80,089.67

Scrap 11,546.92 6,882.27

125,683.68 86,971.94 (Increase) / Decrease in Stock (35,716.87) (38,711.73)

(H in ‘000)



Salary,Wages & Bonus 58971.42 45973.96

Contribution to Provident & Other Funds 3140.02 2154.56

Staff Welfare Expenses 1754.82 1791.60

Total 63866.26 49920.12

(H in ‘000)



Interest Expense 143,505.02 119,368.35

Bank Charges 18,327.22 39,124.78

Total 161,832.24 158,493.13

2.21 CHANGES IN STOCK OF FINISHED GOODS AND WORK IN PROGRESS

2.22 EMPLOYEES BENEFIT EXPENSES

2.23 FINANCE COST



(H in ‘000)



(a) Manufacturing Expense :Power Consumed 30,586.93 30,784.71

Fuel Consumed 51,455.40 64,920.08

Stores Consumed 23,629.03 23,442.15

Job Work / Processing Charges 10,854.33 18,683.89

Wages-Direct Labour Contract 8,656.15 8,341.02

Repairs and Maintenance - Plant & Machineries 2,605.52 3,586.41

Repairs and Maintenance - Buildings 442.32 648.93

Total (a) 128,229.68 150,407.19 (b) Administrative & Other Expense :

Payment to Auditors

- Audit Fees 325.00 250.00

- Certification and Other matters 50.00 55.30

Director's Sitting Fees 495.00 330.00

Exchange Fluctuation loss (Net) 0.00 1,144.38

Insurance Expense 971.34 752.95

Professional Fees 6,134.91 9,970.33

Rates & Taxes 6,390.10 12,704.44

Rent Expense 590.68 1,001.87

Repairs and maintenance - Others 2,189.41 2,515.71

Loss on sale of fixed assets 42.98 0.00

Donations and Contributions 1.00 30.00

Miscellaneous Expenses 43,768.41 54,003.74

Total (b) 60,958.83 82,758.72 Total (a+b) 189,188.51 233,165.91

2.24 OTHER EXPENSES



77

(H in ‘000)



Income Tax on account of Disallowance 5282.69 6132.80

Penalty on account of Disallowances of Expenses 2.00 503.64

Service Tax on account of Cenvat Credit 9608.67 2738.52

Excise on account of Cenvat Credit 2979.31 0.00

Central Sales Tax Demand on Account of ‘C’ Form 7104.84 2789.15

(H in ‘000)



Capital Goods 3172.60 24785.42

Raw Materials 10892.88 39004.26

(H in ‘000)



Commission on Export Sales 571.33 817.22

Finance Cost 7583.46 17115.43

Exhibitions & Sales Promotions 283.42 1213.49

Professional Fees 0.00 445.88

Export Expenses 0.00 1346.20

Foreign Travel Expenses 1793.68 1334.96

(H in ‘000)



Bank Guarantee 38599.70 49415.59

(H in ‘000)



Estimated Amount of Contracts remaining to be executed on Capital

Accounts and not provided for, net of advances

6789.00 23500.00

2.25 NOTES FORMING PART OF FINANCIAL STATEMENTS


1. Contingent Liabilities A. Disputed Liabilities- In Appeal

3. C.I.F. value of Imports

4. (a) Expenditure in Foreign Currency

2. Estimated Amount of Contracts-Capital Accounts

B. Guarantee Given By Bankers on Behalf of Company

The future cash flow 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.



(H in ‘000)



F.O.B. value of exports 178844.48 113674.64

(H in ‘000)



Relating to Exports during the year as part of Sales 2173.57 2215.59

(H in ‘000)



Interest & Other Finance Charges 1911.11 1961.51

Foreign Exchange (Gain) / Loss (Net) 16026.94 (22113.78)

Total 17938.05 (20152.27)

(H in ‘000)



Principal Amount due to suppliers under MSMED Act, 2006, 2849.23 83.53

Principal Amount due to suppliers under MSMED Act, 2006, beyond the

appointed day

2235.16 378.05

Interest accrued and due to suppliers under MSMED Act, on the above

amount

29.99 13.60

Interest paid to suppliers under MSMED Act (Section 16) 7.59 291.36

Interest accrued and remaining unpaid at the end of the year to

suppliers under MSMED Act

29.99 7.59

(H in ‘000)



On settlement / revaluation of current assets 2291.49 2360.64

On settlement / revaluation of current liabilities (1738.66) (3430.41)

2.25 NOTES FORMING PART OF FINANCIAL STATEMENTS (contd..)

(b) Earnings in Foreign Currency

5. Exchange difference Gain/(Loss) on account of fluctuations in foreign currency rates

6. Details of amount Capitalised during the year to Fixed Assets

7. The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at March 31, 2016. The disclosure pursuant to the said Act is as under

(a) Recognized in Profit and Loss Account



79


(H in ‘000)



Profit used as Numerator for calculating Earnings per Share (99870.14) (79470.28)

Weighted Average Number of Share used in computing BasicEPS 14075829 13576651

Number of Share used in computing Diluted EPS 14892267 14892267

Nominal Value per Share (In H) 10 10

Basic Earnings per Share (In H) (7.10) (5.85)

Diluted Earnings per Share (In H) (6.71) (5.34)

Key Management Personnel Mr. Babulal S. Sanghvi

Mr. Jayantilal 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 Key Management Personnel or their Relatives

Babulal Sanghvi (HUF)

Jayantilal Sanghvi (HUF)

Naresh Sanghvi (HUF)

Vikram Sanghvi (HUF)

Babulal Sanghvi (HUF))

Gautam Stainless Pvt. Ltd.

Subsidiary Company Sanghvi Europe B V, The Netherlands


8. Computation of Earnings per Share (EPS)

9. Related Party Details

(a) Related Party Disclosures




(H in ‘000)Particulars Subsidiary Company Key Management

PersonnelRelative of Key

Management PersonnelEnterprises under

Significant Influence of Key management

Personnel or their Relatives

Total

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

Purchase of Goods/DEPB - - - - - - 4,424.64 - 4,424.64 -

Gautam Stainless Pvt. Ltd. - - - - - - 4,424.64 - 4,424.64 -

Receiving of Services - - - - - - 25.54 347.97 25.54 347.97

Gautam Stainless Pvt. Ltd. - - - - - - 25.54 347.97 25.54 347.97

Sale of Goods 30,187.41 15,405.90 - - - - 86.29 1,189.10 30,273.69 16,595.00

Gautam Stainless Pvt. Ltd. - - - - - - 86.29 1,189.10 86.29 1,189.10

Sanghvi Europe B.V. 30,187.41 15,405.90 30,187.41 15,405.90

Interest paid - - - - - - 190.75 - 190.75 -

Gautam Stainless Pvt. Ltd. - - - - - - 190.75 - 190.75 -

Loans - Given 397.09 84.73 - - - - - - 397.09 84.73

Sanghvi Europe B.V. 397.09 84.73 - - - - - - 397.09 84.73

Loans - Repaid / Converted - - 37,775.00 20,385.00 4,523.94 2,695.00 3,539.08 4,750.00 45,838.02 27,830.00

Babulal S. Sanghvi - - 9,137.50 5,218.75 - - - - 9,137.50 5,218.75

Jayantilal B. Sanghvi - - 11,317.50 4,718.75 - - - - 11,317.50 4,718.75

Naresh B. Sanghvi - - 8,537.50 4,853.75 - - - - 8,537.50 4,853.75

Vikram B. Sanghvi - - 8,782.50 5,593.75 8,782.50 5,593.75

Meena J. Sanghvi - - - - 4,163.94 750.00 - - 4,163.94 750.00

Kiran N. Sanghvi - - - - 360.00 150.00 - - 360.00 150.00

Sheetal V. Sanghvi - - - - - 1,650.00 - - - 1,650.00

Babulal Sanghvi (HUF) - - - - - - - 400.00 - 400.00

Jayantilal B. Sanghvi (HUF) - - - - - 145.00 - - - 145.00

Naresh B. Sanghvi (HUF) - - - - - - 35.00 - 35.00 -

Vikram Sanghvi (HUF) - - - - - - 35.00 - 35.00 -

Gautam Stainless Pvt. Ltd. - - - - 3,469.08 4,350.00 3,469.08 4,350.00

Loans - Received / Taken 481.81 - 39,371.00 43,125.00 6,675.00 4,450.00 39,615.75 8,260.00 86,143.56 55,835.00

Babulal Sanghvi - - 9,930.00 5,850.00 - - - - 9,930.00 5,850.00


Naresh B. Sanghvi - - 4,551.00 9,500.00 - - - - 4,551.00 9,500.00

Vikram B. Sanghvi - - 13,250.00 11,425.00 - - - - 13,250.00 11,425.00

BhamriDevi B. Sanghvi - - - - 500.00 - - - 500.00 -

Meena J. Sanghvi - - - - 500.00 3,500.00 - - 500.00 3,500.00

Kiran N. Sanghvi - - - - 4,275.00 500.00 - - 4,275.00 500.00

Sheetal V. Sanghvi - - - - 1,400.00 450.00 - - 1,400.00 450.00

Babulal Sanghvi (HUF) - - - - - - 1,825.00 - 1,825.00 -

Jayantilal Sanghvi (HUF) - - - - - - 9,400.00 955.00 9,400.00 955.00

Naresh Sanghvi (HUF) - - - - - - 10,800.00 2,165.00 10,800.00 2,165.00

Vikram Sanghvi (HUF) - - - - - - 6,250.00 790.00 6,250.00 790.00

Gautam Stainless Pvt. Ltd. - - - - - - 11,340.75 4,350.00 11,340.75 4,350.00

Sanghvi Europe B.V. 481.81 - - - - - - - 481.81 -

Investment 6.75 6.75 - - - - - - 6.75 6.75

Sanghvi Europe B.V. 6.75 6.75 - - - - - - 6.75 6.75

Interest Expenses - - - - - - - - - -

Rental Paid - - 36.00 36.00 180.00 180.00 - - 216.00 216.00

BhamriDevi B. Sanghvi - - - - 180.00 180.00 - - 180.00 180.00

Jayantilal B. Sanghvi - - 36.00 36.00 - - - - 36.00 36.00

Director's Remuneration - - 8,304.66 7,045.77 - - - - 8,304.66 7,045.77

(b) Related Party Transaction



81

(H in ‘000)



Contribution to Provident Fund 2593.55 1925.80

10. Contributions are made to Recognized 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 recognized as expense in respect of

these defined contribution plans, aggregate to H2593.55 Thousands (Previous Year H1925.80 Thousands)

In respect of Gratuity, Contributions are made to LIC’s Recognized Group Gratuity Fund Scheme based on amount

demanded by LIC of India. Provision for Gratuity is based on actuarial valuation carried 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.



(b) Related Party Transaction(H in ‘000)

Particulars Subsidiary Company Key Management Personnel

Relative of Key Management Personnel

Enterprises under Significant Influence of Key management

Personnel or their Relatives

Total

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

Balance Outstanding - (Receivables)/Payables (Net)

Loans & Advances - 84.73 38,390.21 36,794.21 10,628.17 8,477.12 45,237.44 9,477.44 94,255.82 54,833.49

Babulal S. Sanghvi - - 1,957.10 1,164.60 - - - - 1,957.10 1,164.60


Naresh B. Sanghvi - - 6,652.09 10,638.59 - - - - 6,652.09 10,638.59

Vikram B. Sanghvi - - 16,118.70 11,651.20 - - - - 16,118.70 11,651.20

BhamriDevi B. Sanghvi - - - - 2,622.30 2,122.30 - - 2,622.30 2,122.30

Meena J Sanghvi - - - - 500.00 4,163.94 - - 500.00 4,163.94

Kiran N Sanghvi - - - - 5,289.74 1,374.74 - - 5,289.74 1,374.74

Sheetal V Sanghvi - - - - 2,216.14 816.14 - - 2,216.14 816.14

Babulal Sanghvi (HUF) - - - - - - 1,825.00 - 1,825.00 -

Jayantilal Sanghvi (HUF) - - - - - - 12,732.51 3,477.51 12,732.51 3,477.51

Naresh Sanghvi (HUF) - - - - - - 14,211.77 3,446.77 14,211.77 3,446.77

Vikram Sanghvi (HUF) - - - - - - 8,768.16 2,553.16 8,768.16 2,553.16

Sanghvi Europe B.V. - 84.73 - - - - - - - 84.73

Gautam Stainless Pvt. Ltd. - - - - - - 7,700.00 - 7,700.00 -

Trade Payable / Receivable 23,366.34 15,127.83 - - - - 3,431.81 789.78 26,798.15 15,917.61

Gautam Stainless Pvt. Ltd. (Vendor)

- - - - - - 3,350.17 112.59 3,350.17 112.59

Gautam Stainless Pvt. Ltd. (Customer)

- - - - - - 81.63 677.19 81.63 677.19

Sanghvi Europe B.V. (Customer)

23,366.34 15,127.83 23,366.34 15,127.83

Investments 6.75 6.75 - - - - - - 6.75 6.75

Sanghvi Europe B.V. 6.75 6.75 6.75 6.75

Personal Guarantee Given to Bank against Working capital & Term loan outstanding Amount.



(H in ‘000)



Reconciliation of liability recognized in the Balance Sheet Present value of commitments (as per Actuarial Valuation) 1304.60 838.56Fair value of plan assets (1378.22) (999.88)Net (liability) / asset in the Balance sheet (73.62) (161.32)Movement in net liability recognized in the Balance sheet Net liability as at the beginning of the year 161.32 76.20Net expense recognized in the Profit and Loss account (457.93) (221.76)Contribution during the year 370.23 306.88Net (liability) / asset in the Balance sheet 73.62 161.32Expense recognized in the Profit and Loss account Current Service cost 530.19 302.91Interest cost 64.57 43.93Expected return on plan assets (92.74) (68.75)Actuarial (gains)/ losses (44.08) (56.33)Expense charged to the Profit and Loss account 457.94 221.76Return on plan assetsExpected return on plan assets 92.74 68.75Actuarial gains/ (losses) (33.22) (8.01)Actual return on plan assets 59.52 60.74Reconciliation of defined-benefit commitmentsCommitments as at the beginning of the year 838.56 556.07Current service cost 530.19 302.90Interest cost 64.57 43.93Paid benefits (51.42) (0.00)Actuarial (gains)/ losses (77.30) (64.34)Commitments as at the year end 1304.60 838.56Reconciliation of plan assetsPlan assets as at the beginning of the year 999.88 632.27Expected return on plan assets 92.74 68.74Contributions during the year 370.23 306.88Paid benefits (51.42) 0.00Actuarial gains/ (losses) (33.22) (8.01)Plan assets as at the year end 1378.21 999.88The 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

requirements and expenseDiscount rate 7.70% 7.90%Expected return on plan Assets 8.00% 8.75%Expected rate of salary increase 8.00% 8.00%


Category of Plan Assets: The Company’s Plan Assets in respect of Gratuity are funded through the Group Scheme of

the LIC of India

11. 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 H584.70 thousands (P.Y. H907.63 Thousands).



83



(H in ‘000)

Particulars Domestic Export TotalSegment Revenue (Net) For the Year ended March

31,2016

469331.57 199291.42 668622.99

Segment Revenue (Net) For the Year ended March

31,2015

706322.63 154120.96 860443.59

(H in ‘000)

Sr. Particulars Rate of Interest Repayment Termsi Term Loan I - INR 2.90 % above BRi.e

12.20% p.a.

84 structured monthly installmentfrom August2015

Ii WCTL- INR 2.90 % above BR i.e

12.20% p.a

84 structured monthly installment from August 2015

Iii Term Loan – ECB / USD 324 bps over LIBOR 26 quarterly installments from August 2012. (Default in

Installment and interest as on 31/03/2016 amounting to

H10786 (P.Y. H10177) and Nil (P.Y. H1429) respectively)

Iv Term Loan II - INR 2.90 % above BR i.e

12.20% p.a.

26 quarterly installments from August 2012. (Default in


H17510 (P.Y. H 941) and H25100 (P.Y. H338) respectively)

13. Company has received H52.61 Lakh which is credited to Profit & Loss Account from MGVCL towards rebate of Electricity

Duty for the year 2013-14 & 2014-15.

14. Terms and Conditions of Loans From Banks:- [Refer Notes 2.4 (a)(i)]

12. 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 reportablesegment of

Domestic Sales and Export Sale

15. Terms and Conditions of Unsecured Loan: Repayment terms – Repayable after 3 years and Interest at 0 to 12 %.

16. Previous financial year’s figures have been regrouped wherever necessary to make them comparable with those of

the current year.






Independent Auditor’s Report

Report on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial

statements of SANGHVI FORGING & ENGINEERING

LIMITED (‘’the company’’) and its subsidiary (the company

and its subsidiary constitute ’’the group”) comprising of

the Consolidated Balance Sheet as at 31st March 2016,

the Consolidated Statement of Profit and Loss, the

Consolidated Cash Flow Statement for the year ended, and

a summary of the significant accounting policies and other

explanatory information (hereinafter referred to as “the

consolidated financial statements”).

Management’s Responsibility for the Financial Statements The Company’s Board of Directors is responsible for the

preparation of these consolidated financial statements in

terms of the requirements of the Companies Act, 2013

(hereinafter referred to as “the Act”) that give a true and fair

view of the consolidated financial position, consolidated

financial performance and consolidated cash flows of

the Group in accordance with the accounting principles

generally accepted in India, including the Accounting

Standards specified under Section 133 of the Act, read

with Rule 7 of the Companies (Accounts) Rules, 2014. The

respective Board of Directors of the companies included

in the Group are responsible for maintenance of adequate

accounting records in accordance with the provisions of

the Act for safeguarding the assets of the Group and for

preventing and detecting frauds and other irregularities;

the selection and application of appropriate accounting

policies; making judgments and estimates that are

reasonable and prudent; and the design, implementation

and maintenance of adequate internal financial controls,

that were operating effectively for ensuring the accuracy

and completeness of the accounting records, relevant

to the preparation and presentation of the financial

statements that give a true and fair view and are free from

material misstatement, whether due to fraud or error,

which have been used for the purpose of preparation of

the consolidated financial statements by the Directors of

the Company, as aforesaid.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these

consolidated financial statements based on our audit.

While conducting the audit, we have taken into account

the provisions of the Act, the accounting and auditing

standards and matters which are required to be included

in the audit report under the provisions of the Act and the

Rules made thereunder.

We conducted our audit in accordance with the Standards

on Auditing specified under Section 143(10) of the Act.

Those Standards require that we comply with ethical

requirements and plan and perform the audit to obtain

reasonable assurance about whether the consolidated

financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit

evidence about the amounts and the disclosures in

the consolidated financial statements. The procedures

selected depend on the auditor’s judgment, including

the assessment of the risks of material misstatement

of the consolidated financial statements, whether due

to fraud or error. In making those risk assessments, the

auditor considers internal financial control relevant to

the Company’s preparation of the consolidated financial

statements that give a true and fair view in order to design

audit procedures that are appropriate in the circumstances

but not for the purpose of expressing an opinion on

whether the Company has an adequate internal financial

controls system over financial reporting in place and the

operating effectiveness of such controls.

An audit also includes evaluating the appropriateness of

the accounting policies used and the reasonableness of

the accounting estimates made by the Company’s Board

of Directors, as well as evaluating the overall presentation

of the consolidated financial statements.

We believe that the audit evidence obtained by us and the

audit evidence obtained by the other auditors in terms of

their reports referred to in sub-paragraph (a) of the Other

Matters paragraph below, is sufficient and appropriate to

provide a basis for our audit opinion on the consolidated

financial statements.

To the Members of

SANGHVI FORGING & ENGINEERING LIMITED



85

OpinionIn our opinion and to the best of our information and

according to the explanations given to us, the aforesaid

consolidated financial statements give the information

required by the Act in the manner so required and give

a true and fair view in conformity with the accounting

principles generally accepted in India, of the consolidated

state of affairs of the Group, as at 31st March, 2016, and

their consolidated loss and their consolidated cash flows

for the year ended on that date.

Other MatterThe consolidated financial statements include unaudited

financial statements of subsidiary, whose financial

statements reflect total assets of H29260.74 in (H000) as

at 31st March 2016, total revenue of H32958.68 in (H000)

and net cash flows amounting to H738.04 in (H000)for the

year ended as considered in the consolidated financial

statements. Financial statements of the subsidiary have

not been audited by us. These financial statements are

unaudited and have been furnished to us by management

and our opinion, in so far as it relates to the amounts

included in respect of this subsidiary is based solely on

such unaudited financial statements. In our opinion and

according to the information and explanations given to

us by the Management, this financial statement is not

material to the Group.

Our opinion on the consolidated financial statements, and

our report on Other Legal and Regulatory Requirements

below, is not modified in respect of the above matters

with respect to the financial statements certified by the

Management.

Report on Other Legal and Regulatory Requirements

1. Further, As required by section 143(3) of the Act, we

report that:

a) We have sought and obtained all the information

and explanations which to the best of our

knowledge and belief were necessary for the

purposes of our audit of the aforesaid consolidated


b) In our opinion proper books of account as required

by law relating to preparation of the aforesaid

consolidated financial statements have been

made so far as appears from our examination of

those books.

c) The Consolidated Balance Sheet, the Consolidated

Statement of Profit and Loss, and the Consolidated

Cash Flow Statement dealt with by this Report are

in agreement with the relevant books of account

maintained for the purpose of preparation of the

consolidated financial statements.

d) In our opinion, the aforesaid consolidated financial

statements comply with the Accounting Standards

specified under Section 133 of the Act, read with

Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received

from the directors of the Holding company as on

31st March 2016, and taken on record by the Board

of Directors, none of the directors is disqualified

as on 31st March 2016, from being appointed as a

director in terms of section 164(2) of the Act.

f) With respect to the matter to be included in the

Auditor’s report in accordance with Rule 11 of the

Companies (Audit and Auditors) Rules, 2014 in our

opinion and to the best of our information and

according to the explanations given to us:

i. The group has disclosed the impact of pending

litigations on its consolidated financial

position in Note 2.25(1A) of the consolidated


ii. The group did not have any long term

contracts including derivatives contracts for

which there were an material foreseeable

losses.

iii. There is no such amount which is required

to be transfer to the Investor education and

protection fund by the holding company

incorporated in India.


Firm No.: 118852W


Date : 25th May, 2016 M.No.046255


(H in ‘000)

Sr. Particulars Note No. As at March 31, 2016


I. EQUITY AND LIABILITIES

(1) Shareholders' Funds :

(a) Share Capital 2.1 148,923.43 138,922.67

(b) Reserves and Surplus 2.2 287,112.82 353,904.50

(c) Money received against share warrants 2.3 0.00 11,250.00

(2) Non-Current Liabilities:

(a) Long-Term Borrowings 2.4 879,403.68 940,890.10

(b) Other Long Term Liabilities 2.5 0.00 114.00

(3) Current Liabilities:

(a) Short - Term Borrowings 2.6 265,737.51 269,936.66

(b) Trade Payables 2.7

- Trade Payables for Goods & Services 167,558.43 181,987.76

- Trade Payables for Micro,Small and Medium Enterprises 2,849.33 83.53

(c) Other Current Liabilities 2.8 231,778.80 235,995.36

(d) Short - Term Provisions 2.9 18,718.51 12,840.53

Total 2,002,082.51 2,145,925.11

II. ASSETS

(1) Non - Current Assets:

(a) Fixed Assets 2.10

(i) Tangible Assets 1,560,889.42 1,502,358.32

(ii) Intangible Assets 2,984.16 3,497.33

(iii) Capital Work-in-Progress 4,457.76 101,733.89

(b) Deferred Tax Assets (Net) 2.11 0.00 0.00

(c) Long Term Loans and Advances 2.12 15,392.56 10,162.27

(2) Current Assets:

(a) Inventories 2.13 236,202.23 208,774.73

(b) Trade Receivables 2.14 123,838.42 244,661.83

(c) Cash and Bank Balances 2.15 11,701.46 24,266.93

(d) Short - Term Loan and Advances 2.16 41,823.71 46,878.26

(e) Other Current Assets 2.17 4,792.79 3,591.55

Total 2,002,082.51 2,145,925.11



Consolidated Balance Sheet As at March 31, 2016







87





(H in ‘000)

Sr. Particulars NoteNo.



I. INCOME :

(a) Revenue from Operations 2.18 760,960.85 943,321.82

Less : Excise Duty (44,472.30) (70,429.12)

Net Revenue from Operations 716,488.55 872,892.70

(b) Other Income 2.19 9,517.74 2,438.06

Total Revenue 726,006.29 875,330.76

II. EXPENSES

(a) Cost of Material Consumed 2.20 354,188.74 470,162.08

(b) Changes in Inventory of Finished Goods and Work in

Progress

2.21 (31,027.07) (38,711.73)

(c) Employee Benefits Expense 2.22 63,866.26 50,113.30

(d) Finance Costs 2.23 161,832.24 158,502.13

(e) Depreciation and Amortization Expense 2.10 84,202.39 83,524.49

(f) Other Expenses 2.24 196,387.63 233,179.25

829,450.19 956,769.52

III. PROFIT/(LOSS) BEFORE TAX (103,443.90) (81,438.76)

TAX EXPENSES

- Current Tax 0.00 0.00

- Deferred Tax ( Refer Note 2.11) 0.00 0.00

- (Excess) / Short Provision for tax relating to prior years 584.38 (13.89)

584.38 (13.89)

IV. PROFIT/(LOSS) FOR THE YEAR (104,028.28) (81,424.87)

Basic Earning Per Share(Face Value of H 10 Per Share) (7.39) (6.00)

Diluted Earning Per Share(Face Value of H 10 Per Share) (6.99) (5.47)

[Refer to Note No. 2.25 (8)]



Consolidated Statement of Profit and Loss For the year ended March 31, 2016


Consolidated Cash Flow Statement For the year ended March 31, 2016

(H in ‘000)



A. Cash Flow From Operating Activities:

Net Profit Before Tax and Extra ordinary Items (103443.90) (81438.76)

Adjustment for:

Depreciation /Amortization /Impairment 84202.39 83524.49

Unrealised Profit on Inventory 2236.60 0.00

Interest Expense / Finance Cost 143505.02 119368.35

Interest Income (1538.08) (2010.07)

Loss/ (Profit) on sale of Fixed Assets 28.78 (7.66)

Operating Profit Before Working Capital Changes 124990.81 119436.35

Adjustment for (increase)/decrease in Operating assets:

Inventories (27427.50) (55995.79)

Trade Receivables 120823.41 (127169.13)

Short Term Loan & Advances 5054.55 7041.45

Other Current Assets (1201.24) (2839.57)

Long Term Loan & Advances (5230.29) (1502.54)

92018.93 (180465.58)

Adjustment for (increase)/decrease in Operating liabilities:

Trade Payable (11663.53) 51051.05

Non-Current Liabilities (114.00) (23451.15)

Other Current Liabilities (4216.57) (359289.96)

Short Term Provisions 5877.97 4921.53

(10116.13) (326768.53)

Cash Generated From Operation 206893.61 (387797.77)

Income Tax Expense 584.38 (13.89)

Net Cash Generated From Operating Activities 206309.24 (387783.88)

B. Cash Flow From Investing Activities

Acquisition of Fixed Assets (45355.95) (63288.21)

Sales / Devaluation of Assets 0.00 23514.55

Proceed from Sale of Fixed Assets 383.00 30.48

Change in Bank Margin Money / FD Originally Matured in more than

three months

12870.18 (3104.59)

Interest Received 1538.08 2010.07

Net Cash Used in Investing Activities (30564.69) (40837.70)



89

Consolidated Cash Flow Statement For the year ended March 31, 2016

(H in ‘000)



C. Cash Flow From Financing Activities

Increase in Share Capital 10000.76 6000.00

Security Premium 23750.00 22125.00

Long Term Loan from Bank (61486.42) 533704.54

(Repayments)/ Short Term Borrowing from Bank (4199.15) (13538.56)

Finance Cost (Interest & Bank Charges) (143505.02) (119368.35)

Net Cash used in Financing Activities (175439.83) 428922.64

Net Increase /(Decrease)in Cash and Bank Balance ( A+B+C) 304.71 301.06

Opening Balance of Cash & Cash Equivalent 1352.99 1051.93

Closing Balance Cash & Cash Equivalent # 1657.70 1352.99

# Comprises of,

Cash on Hand 773.85 727.61

Balance with Bank -Current Accounts 883.85 625.38

1657.70 1352.99






Notes Annexed to and forming part of the Consolidated Financial Statements As on March 31, 2016

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 group is having capacity of 18600 MTPA which

includes 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.

Sanghvi Europe B.V. in based in Netherland, a wholly owned

subsidiary of SFEL is engaged in dealing of Wholesale Steel

& Stainless Steel semi-finished products.

1. SIGNIFICANT ACCOUNTING POLICIES TO FINANCIAL STATEMENTS

I. Basis for preparation of financial accounting The consolidated financial statements of the company

and its subsidiaries (“the group”) have been prepared

on an accrual basis under historical cost convention

and in accordance with Generally Accepted Accounting

Principles in India (‘Indian GAAP’) to comply with the

Accounting Standards specified under Section 133

of the Companies Act, 2013, read with Rule 7 of the

Companies (Accounts) Rules, 2014 and the relevant

provisions of the Companies Act, 2013 (“the 2013 Act’)

/ Companies Act, 1956 (“the 1956 Act”), as applicable.

These Financial statements are prepared under

historical cost conventions on accrual.

II. Use of Estimates The preparation of the consolidated financial

statements in conformity with Indian GAAP requires

the management to make estimates and assumptions

that affect the reported amount of assets and

liabilities (including contingent liabilities) on the date

of the financial statements and the reported amount

of revenues and expenses during the reporting period.

The management believes that the estimates used in

preparation of the consolidated financial statements

are prudent and reasonable. Future results could differ

due to these estimates and the differences between

the actual results and the estimates are recognised in

the periods in which the results are known/materialize.

III. Principle of Consolidation The consolidated financial statements of the group

for the year ended March 31, 2016 are prepared

in accordance with generally accepted accounting

principles applicable in India, and the Accounting

Standard 21 (AS-21) on ‘Consolidation of Financial

Statements’, notified by Companies (Accounting

Standards) Rules, 2006, (as amended) (“Accounting

Standards”) by and to the extent possible in the same

format as that adopted by the group for its separate


The financial statements of the group have been

combined on line by line basis by adding together

the book values of like items of assets and liabilities,

income and expenses after eliminating intra group

balances and intra group transactions except where

cost cannot be recovered. The unrealized profits or

losses resulting from the intra group transactions and

balances have been eliminated.

The consolidated financial statements are prepared

using uniform accounting policies for like transactions

and other events in similar circumstances and

necessary adjustments required for deviations, if any,

are made in the consolidated financial statements.

The consolidated financial statements are presented

in the same manner as the Company’s unconsolidated

financial statements. The financial statements of

the subsidiary companies used in the consolidation

are drawn up to the same reporting date as of the

Company.

The subsidiary company considered in consolidated financial statements is as follows:

Name of the subsidiary Ownership Percentage as at 31/3/16 Country of incorporation Consolidated as

Sanghvi Europe B.V. 100% Netherland Subsidiary



91


IV. Fixed Assets and Depreciation /AmortizationA. Tangible Assets Tangible Fixed Assets are stated at historical cost

including borrowing costs, expenditure directly

attributable to the acquisition of the asset and net

charges on foreign exchange contracts and adjustments

arising from exchange rate variations attributable to

the assets less accumulated depreciation there on

and impairment losses if any. Leasehold land having

lease of 99 years or more are treated as free hold land

only and other leases are amortized over the period of

lease.

Subsequent expenditure related to an item of tangible

assets are added to its book value only if they increase

the future benefits from the existing assets beyond its

previously assessed standard of performance.

B. Intangible Assets Intangible assets are stated at acquisition cost, net of

accumulated amortization and accumulated impairment

losses, if any. Intangible assets are amortised on a

straight line basis over their estimated useful lives.

C. Capital Work in Progress Cost of fixed assets not ready for use before the balance

sheet date is disclosed as capital work in progress.

Depreciation: The depreciation during the year has been provided on

straight line basis as per Schedule II of the Companies

act 2013 since the acquisition of respective fixed

assets.

The useful life of assets as adopted by the group as per

schedule II of the Companies act is listed as under:

Perticulars Previous Useful Life

Leasehold Land 20

Building (Factory) 30

Building (Residential) 60

Building (Fences, Wells, etc) 5

Road 5 to 10

Plant and Machinery 15

Plant and Machinery (Heavy Forging

Process Machinery)

20 to 25*

Electrically Operated Vehicles 8

Electrical Installations 10

Laboratory Equipment 10

Windmill 22

Perticulars Previous Useful Life

Computers, Server & Networking

Device

3

Furniture 10

Office equipment 5

Vehicles - Four Wheeler 8

Vehicles - Two Wheeler 10

*Based on an internal technical evaluation made by the

group and on past experience , estimated useful life

of Plant and machinery listed above best represent

the period over which the management expects to use

these assets. However the useful lives for these asset is

different from that prescribed in schedule II of the Act.

V. Inventories Cost of Inventories have been computed to include all

cost of Purchases, Cost of Conversion and other costs

incurred in bringing the inventories to their present

location and condition.

Inventories are valued at lower of cost or net realizable

value using the First in First out (FIFO) basis.

VI. Revenue Recognition1. Sales of products and services are recognised when

risk and rewards of ownership of the products are

passed on to the customers, which is generally on

dispatch of goods. Sales are inclusive of Excise Duty

but excluding sales tax / Value Added Tax and export

incentives. Interest incomes are recognised on time

proportion basis.

2. Revenue from sale of power is recognised when

delivered and measured based on rates as per bilateral

contractual agreements with buyers / at rate arrived at

based on the principles laid down under the relevant

Tariff Regulations as notified by the regulatory bodies,

as applicable.

3. Export incentives are accounted on accrual basis.

Revenue from job charges is recognised completion of

job work.

VII. Cash flow statement Cash flows are reported using the indirect method

whereby profit before tax is adjusted for the effects of

the transactions of a non cash nature and any deferrals or

accruals of past or future cash receipts or payments. The

cash flows from regular revenue generating, financing

and investing activities of the group are segregated.


VIII. Leases Rentals applicable to operating leases where

substantially all of the benefits and risks of ownership

remain with the lessor are charged against profits on

straight line basis over the lease period.

IX. Foreign Currency Transactions , Foreign Operations and Forward contracts and derivatives

(a) Transactions denominated in foreign currencies

are recorded at the rate prevailing on date of

transaction

(b) In respect of monetary items denominated in

foreign currency at the year-end are translated at

the year-end rates.

(c) Any income or expenses on account of exchange

differences either on settlement or on transactions

are Recognised in the Profit and Loss Account.

(d) Exchange difference relating to long term foreign

currency monetary item to the extent they are

used for financing the acquisition of fixed assets

are adjusted from the cost of such fixed assets.

(e) Financial statements of foreign operations are

treated as integral operations and translated for

Assets and liabilities at rates prevailing at the end

of the year and Net revenues at the average rate

for the year.

(f) Exchange differences arising on such translation

are recognised as income or expense of the period

in which they arise.

(g) Forward contracts, other than those entered into

to hedge foreign currency risk on unexecuted

firm commitments or highly probable forecast

transactions, are treated as foreign currency

transactions and accounted accordingly as per

Accounting Standard (AS) 11 “The Effects of

Changes in Foreign Exchange Rates”. Exchange

differences arising on such contracts are

recognised in the period in which they arise.

X. Taxes on Income Provision for taxation comprises of Current Tax and

Deferred Tax. Current tax provision has been made

after considering reliefs and deduction available

under Income Tax Act, 1961. Deferred tax resulting

from “timing differences” between taxable and

accounting income is accounted for using the tax rates

and laws that are enacted or substantively enacted as

on the balance sheet date. The deferred tax assets is

recognised and carried forward only to the extent the

assets can be realized in future. However, where there

is unabsorbed depreciation or carry forward losses

under taxation laws, deferred tax assets are recognised

only if there is virtual certainty of realization of such

assets. Deferred tax assets are reviewed as at each

Balance sheet date.

Minimum Alternate Tax (MAT) Credit: MAT credit is

recognised, as an Asset only when and to the extent

there is convincing evidence that the group will pay

normal income tax during the specified year. In the

year in which the Minimum Alternative tax (MAT)

credit becomes eligible to be recognised as an asset

in accordance with the recommendation contained

in Guidance Note issued by the Institute of Chartered

Accountants of India, the said asset is created by way

of a credit to the statement of profit and loss and

shown as MAT Credit Entitlement. The group reviews

the same at each balance sheet date and writes down

the carrying amount of MAT Credit Entitlement to

the extent there is no longer convincing evidence to

the effect that Company will pay normal Income Tax

during the specified period.

XI. Employee Benefits (a) The Company’s contribution in respect of

provident fund is charged to Profit and Loss

Account each year on accrual basis.

(b) Short term compensated absences are provided

based on past experience

(c) With respect to gratuity liability, Company

contributes to Life Insurance Corporation of India

(LIC) under LIC’s Group Gratuity policy. Gratuity

liability as determined on actuarial basis by the

independent valuer. Actuarial gain/loss is charged

to Profit and Loss Account.

XII. Borrowing Costs (a) Borrowing Cost attributable to acquisition and

construction of qualifying assets are capitalized as

part of the cost of such assets up to the date when

such assets are ready for intended use.

(b) Other borrowing cost is charged to Profit and Loss

Account.




93


XIII. Provisions, Contingent Liabilities and Contingent Assets

Provision is recognised only when there is a present

obligation as a result of past events and when reliable

estimates of the amount of the obligation can be

made. Contingent liability is disclosed for:-

(a) Possible Obligations which will be confirmed only

by future events not wholly within the control of

the group or

(b) Present obligations arising from past events where

it is not probable that an outflow of resources will

be required to settle the obligation or reliable

estimates of the amount of the obligation cannot

be made. Contingent Assets are not recognised

in the financial statements since this may result

in the recognition of income that may never be

realized.

XIV. Impairment of Assets The group assesses at each Balance Sheet date whether

there is any indication that an asset may be impaired.

If any such indication exists, the group estimates the

recoverable amount of the asset. If such recoverable

amount of the asset or the recoverable amount of

the cash generating unit to which the asset belongs

is less than its carrying amount, the carrying amount

is reduced to its recoverable amount. The reduction

is treated as an impairment loss and is recognised in

the Profit and Loss Account. If at the Balance Sheet

date there is an indication that if a previously assessed

impairment loss no longer exists, the recoverable

amount is reassessed and the asset is reflected at the

recoverable amount.

XV. Application of Securities Premium Account Share issue expenses are charged first against available

balance in Securities Premium Account.

XVI. Earning Per Share The group reports basic and diluted earnings per

share in accordance with the Accounting Standard –

20-‘Earning per Share’ prescribed by the Companies

(Accounting Standard) Rules 2006. Basic Earnings per

Share is computed by dividing the net profit or loss for

the year by the weighted average number of Equity

Share outstanding during the year. Diluted earning

per share is computed by dividing the net profit or loss

for the year by the weighted number of equity shares

outstanding during the year as adjusted for the effects

of all dilutive potential equity share.

XVII.Investments Current Investments are carried at lower of cost and

Market Value. Non-Current (Long Term) investments

are stated at cost. Provision for diminution in the

value of Non Current investments is made only if such

a decline is other than temporary.

XVIII.Government Grant: Grant from the government are recognized when

there is reasonable assurance that;

I. The Company will comply with the conditions

attached to them and

II. The grant will be received.

Government grants related to revenue are recognized

on systematic basis in the statement of profit and loss

over the periods necessary to match them with the

related costs which they are intended to compensate.

Such grants are deducted in reporting the related

expenses.

When company receives non-monetary grants, the

asset is accounted for on the basis of its acquisition

cost. In case non-monetary asset is given free of cost it

is recognized at a nominal value.



Particulars As at March 31, 2016 As at March 31, 2015

Nos. (J in 000) Nos. (J in 000)

Equity Shares

At the beginning of the year 13892267 138922.67 13292267 132922.67

Issued during the year

(a) Preferential Issue by conversion of

warrant

1000000 10000.00 600000 6000.00

Outstanding at the end of the year 14892267 148922.67 13892267 138922.67

Sr. Name of the Shareholder As at March 31, 2016 As at March 31, 2015

Number of shares

% holding Number of shares

% holding

1 Shri Jayantilal B. Sanghvi 1,925,591 12.93 1,675,591 12.06

2 Shri Babulal S. Sanghvi 1,714,283 11.51 1,464,283 10.54

3 Shri Naresh B. Sanghvi 1,832,931 12.31 1,582,931 11.39

4 Shri Vikram B. Sanghvi 1,505,682 10.11 1,255,682 9.04

5 M/s. Dango & Dienenthal GMBH & Co. 699,981 4.70 699,981 5.04

Total 7678468.00 51.56 6678468 48.07

(ii) Reconciliation of shares outstanding at the beginning and at the end of the year

(iii) Details of shares held by each shareholder holding more than 5% share in the company (Equity Shares of H10 each fully paid)

(H in ‘000)



(a) AUTHORISED :

20,000,000 No. of Equity Shares Of H10 each 200,000.00 200,000.00

(b) Issued , Subscribed & Paid up Share Capital :

1,48,92,267 No. of Equity Shares of H10 Each

(P.Y. 1,38,92,267 No. of Equity Shares of H10 Each)

148,923.43 138,922.67

Total 148,923.43 138,922.67

2.1 SHARE CAPITAL

(i) 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 Register of Members of the Company shall enjoy the same voting

right and be subject to the same liabilities as all other shareholders of the same class.



95


(H in ‘000)



(a) General Reserve

Opening Balance 3,987.14 3,987.14

Add : Transfer from Profit & Loss Account 264.34 0.00

Closing Balance 4,251.48 3,987.14

(b) Securities Premium

Opening Balance 369,967.97 353,467.97

Add : Premium of Shares Issued during the year 35,000.00 16,500.00

Closing Balance 404,967.97 369,967.97

(c ) Profit & Loss Account

Opening Balance (20,050.61) 62,387.64

Add : Profit/(Loss) for the Year (104,028.28) (81,424.87)

Add : Unrealised Profit on Inventory 2,236.60 0.00

Less : Transitional Adjustment on Depreciation 0.00 1,013.38

Less: Transfer to General Reserve 264.34 0.00

Closing Balance (122,106.63) (20,050.61)

Total 287,112.82 353,904.50

2.2 RESERVES & SURPLUS

(H in ‘000)



(a) Share Warrant Application Money 0.00 11,250.00

(FY 2014-15 :25% application money received against 10,00,000

warrants allotted to promoters under preferential allotment which is

converted in to Equity Shares @ H45 per share (including premium of

H35 per share), as per SEBI(ICDR) Regulations, on 25th January, 2016)

Total 0.00 11,250.00

(H in ‘000)



(a) Secured Loans

(i) Term Loan from Banks

(Secured against all fixed assets (existing & proposed) and

Equitable Mortgage over Leasehold Land) [Refer Note 2.25(14)]

772,147.86 882,868.37

(b) Unsecured Loans

(i) Loans & Advances from Related Parties 86,555.82 55,021.73

(ii) From Inter Corporate Deposits [Refer Note 2.25(15)] 20,700.00 3,000.00

Total 879,403.68 940,890.10

2.3 MONEY RECEIVED AGAINST SHARE WARRANTS

2.4 LONG TERM BORROWINGS



(H in ‘000)



(a) Current Maturity of long term Loan(Secured against all fixed assets (existing & proposed) and Equitable

Mortgage over Leasehold Land. Personal Guarantees of Directors

including pledge of their shares) [Terms of Loan : Refer Notes 2.25 (14)]

126,440.00 90,185.00

(b) Term Loan Intallment due (unpaid) 28,296.00 11,117.75 (c) Interest Accrued and Due on Borrowing 25,100.00 1,767.25 (d) Advance from Customers 8,792.37 22,972.57 (e) Duties & Taxes Payable 3,219.12 1,493.27 (f) Payable - For Capital Goods 39,854.31 108,189.37 (g) Other Outstanding Liabilities 77.00 270.15 Total 231,778.80 235,995.36

2.8 OTHER CURRENT LIABILITIES

(H in ‘000)



(a) For Employee Benefit Expenses 1,455.00 1,014.87 (b) For Other Expenses 17,263.51 11,825.66 Total 18,718.51 12,840.53

2.9 SHORT TERM PROVISIONS

(H in ‘000)



(a) Trade Payable - For Goods & Services 167,558.43 181,987.76 (b) Trade Payable - For Micro, Small & Medium Enterprises 2,849.23 83.53 Total 170,407.66 182,071.29

2.7 TRADE PAYABLES

(H in ‘000)



(a) Secured Loans(i) Working Capital Loan from Banks (Against Hypothecation of Entire Current Assets - Stock of Raw

Material, Work-in-Progress, Finished Goods, Stores & Spares, Trade

Receivables, etc.) (Rate of Interest is 12.20% to 13.25%).

265,737.51 269,936.66

Total 265,737.51 269,936.66

2.6 SHORT TERM B0RROWINGS

(H in ‘000)



(a) Other Outstanding Liabilities 0.00 114.00

Total 0.00 114.00

2.5 OTHER LONG TERM LIABILITIES



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(H in ‘000)



(a) Deferred Tax LiabilityOn account of timing difference of- Depreciation (148,121.20) (116,997.14)

(b) Deferred Tax AssetsOn account of timing difference of- On account of Expenses Allowable on Payment Basis 481.02 329.32 - Unabsorbed Business Loss & Depreciation 147,640.18 116,667.82 (The recognition of deferred tax assets on unabsorbed depreciation has

been restricted to the extent of deferred tax iability on account of timing

difference in respect of depreciation, the reversal of which is virtually certain.)Total 0.00 0.00

(H in ‘000)



Unsecured, Considered Good(a) Capital Advances 4,609.46 0.00(b) Security Deposits 1,271.43 1,513.21 (c) Balance with Revenue Authorities 9,438.05 8488.01(d) Other Loans & Advances # 73.62 161.32

# Includes primarily Gratuity Payable (Dr. Bal) etc.Total 15,392.56 10,162.54

(H in ‘000)



(a) Finished Goods 21,317.40 10,707.00 (b) Raw Materials 49,593.20 65,038.18 (c) Work-in-Progress 145,560.14 114,136.91 (d) Stores & Spare Parts 8,521.70 6,985.98 (e) Packing Materials 59.17 359.74 (f) Scrap 11,150.61 11,546.92 (For mode of valuation of inventories, refer note no. 1(IV )Total 236,202.23 208,774.73

2.11 DEFFERED TAX Assets (Net)

2.12 LONG TERM LOANS & ADVNACES

2.13 INVENTORIES



99


(H in ‘000)



Cash & Cash Equivalents

(a) Cash on Hand 773.85 727.61

(b) Balance with Banks :

In Current Accounts 883.85 625.38

Othre Bank Balances

(a) Bank deposits with original maturity of more than 3 months but less

than 12 months held as margin money.

10,043.76 22,913.94

Total 11,701.46 24,266.93

(H in ‘000)




(a) Balance with Revenue Authorities 36,065.65 40,730.67

(b) Pre - Paid Expenses 838.30 4,422.24

(c) Advance to Suppliers 4,919.75 1,725.35

Total 41,823.70 46,878.26

(H in ‘000)



(a) Export Incentive Recivables 4,340.86 1,145.26

(b) Accrued Interest on Deposits 276.22 886.77

(c) Other Receivables 175.71 1,559.51

Total 4,792.79 3,591.55

(H in ‘000)




(a) Trade receivables outstanding for a period exceeding six months from


26,955.14 27639.79

(b) Trade receivables outstanding for a period less than six months from


96,883.28 217022.03

Total 123,838.42 244,661.83

2.15 CASH & BANK BALANCES

2.16 SHORT TERM LOANS & ADVANCES

2.17 OTHER CURRENT ASSETS

2.14 TRADE RECEIVABLES



(H in ‘000)



(a) Sale of Flanges, Fittings, Forged Bars & Scrap(i) Finished Goods

Sales - Domestic 488,517.79 690,548.78

Sales - Export 199,291.42 154,120.96

Total 687,809.21 844,669.74 (ii) Manufacturing Scrap 58,244.76 87,772.97

746,053.97 932,442.71 (b) Other Operating Revenues

Export Incentives 5,961.57 1,518.62

Power Generation 2,689.05 2,623.81

Other Operating Revenues 6,256.26 6,736.68

14,906.88 10,879.11 Gross Revenue From Operations 760,960.85 943,321.82 Less : Excise Duty (44,472.30) (70,429.12)

Net Revenue From Operations 716,488.55 872,892.70

(H in ‘000)



Interest From Banks & Others 1,538.08 2,010.07

Exchange Fluctuation gain (Net) 2,725.65 0.00

Misc. Income 5,254.01 427.99

Total 9,517.74 2,438.06

(H in ‘000)



Steel ConsumedOpening Balance 65,038.18 58,606.00

Add : Purchase 338,743.76 476,594.26

403,781.94 535,200.26 Less : Closing Stock 49,593.20 65,038.18

Raw Material Consumed 354,188.74 470,162.08 INFORMATION RELATING TO CONSUMPTION OF MATERIALConsumption of Imported & Indigenous MaterialsImported Items 7,181.46 15,776.71

2.03% 3.36%

Indigenous Items 347,007.28 454,385.37

97.97% 96.64%

Total 354,188.74 470,162.08

2.18 REVENUE FROM OPERATIONS

2.19 OTHER INCOME

2.20 COST OF MATERIAL CONSUMED



101


(H in ‘000)



(Increase) / Decrease inClosing Stock:

Work - in - Progress 145,560.14 114,136.75

Scrap 11,150.61 11,546.916

156,710.45 125,683.671 Opening Stock:Work - in - Progress 114,136.76 80,089.67

Scrap 11,546.92 6,882.27

125,683.68 86,971.94 (Increase) / Decrease in Stock (31,027.07) (38,711.73)

(H in ‘000)



Salary,Wages & Bonus 58971.42 46167.14

Contribution to Provident & Other Funds 3140.02 2154.56

Staff Welfare Expenses 1754.82 1791.60

Total 63866.26 50113.30

(H in ‘000)



Interest Expense 143,505.02 119,368.35

Bank Charges 18,327.22 39,133.78

Total 161,832.24 158,502.13

2.21 CHANGES IN STOCK OF FINISHED GOODS AND WORK IN PROGRESS

2.22 EMPLOYEES BENEFIT EXPENSES

2.23 FINANCE COST



(H in ‘000)



(a) Manufacturing Expense :Power Consumed 30,586.93 30,784.71

Fuel Consumed 51,455.40 64,920.08

Stores Consumed 23,629.03 23,442.15

Job Work / Processing Charges 10,854.33 18,683.89

Wages-Direct Labour Contract 8,656.15 8,341.02

Repairs and Maintenance - Plant & Machineries 2,605.52 3,586.41

Repairs and Maintenance - Buildings 442.32 648.93

Total (a) 128,229.68 150,407.19 (b) Administrative & Other Expense :

Payment to Auditors

-Audit Fees 325.00 250.00

-Certification and Other matters 50.00 55.30

Director's Sitting Fees 495.00 330.00

Exchange Fluctuation loss (Net) 0.00 1,144.38

Insurance Expense 971.34 752.95

Professional Fees 6,134.91 9,970.33

Rates & Taxes 6,390.10 12,704.44

Rent Expense 590.68 866.03

Repairs and maintenance - Others 2,189.41 2,515.71

Loss on sale of fixed assets 42.98 0.00

Donations and Contributions 1.00 30.00

Miscellaneous Expenses 50,967.53 54,152.92

Total (b) 68,157.95 82,772.06 Total (a+b) 196,387.63 233,179.25

2.24 OTHER EXPENSES



103


(H in ‘000)



Income Tax on account of Disallowance 5282.69 6132.80

Penalty on account of Disallowances of Expenses 2.00 503.64

Service Tax on account of Cenvat Credit 9608.67 2738.52

Excise on account of Cenvat Credit 2979.31 0.00

Central Sales Tax Demand on Account of ‘C’ Form 7104.84 2789.15

(H in ‘000)



Capital Goods 3172.60 24785.42

Raw Materials 10892.88 39004.26

(H in ‘000)



Commission on Export Sales 571.33 817.22

Finance Cost 7583.46 17115.43

Exhibitions & Sales Promotions 283.42 1213.49

Professional Fees 0.00 445.88

Export Expenses 0.00 1346.20

Foreign Travel Expenses 1793.68 1334.96

(H in ‘000)



Bank Guarantee 38599.70 49415.59

(H in ‘000)



Estimated Amount of Contracts remaining to be executed on Capital

Accounts and not provided for, net of advances

6789.00 23500.00

2.25 NOTES FORMING PART OF FINANCIAL STATEMENTS

1. Contingent Liabilities A. Disputed Liabilities- In Appeal

3. C.I.F. value of Imports

4. (a) Expenditure in Foreign Currency

2. Estimated Amount of Contracts-Capital Accounts

B. Guarantee Given By Bankers on Behalf of Company

The future cash flow 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 cash flow.



(H in ‘000)



F.O.B. value of exports 178844.48 113674.64

(H in ‘000)



Relating to Exports during the year as part of Sales 2173.57 2215.59

(H in ‘000)



Interest & Other Finance Charges 1911.11 1961.51

Foreign Exchange (Gain) / Loss (Net) 16026.94 (22113.78)

Total 17938.05 (20152.27)

(H in ‘000)



Principal Amount due to suppliers under MSMED Act, 2006, 2849.23 83.53

Principal Amount due to suppliers under MSMED Act, 2006, beyond the

appointed day

2235.16 378.05

Interest accrued and due to suppliers under MSMED Act, on the above

amount

29.99 13.60

Interest paid to suppliers under MSMED Act (Section 16) 7.59 291.36

Interest accrued and remaining unpaid at the end of the year to

suppliers under MSMED Act

29.99 7.59

(H in ‘000)



On settlement / revaluation of current assets 2291.49 2360.64

On settlement / revaluation of current liabilities (1738.66) (3430.41)


(b) Earnings in Foreign Currency

5. Exchange difference Gain/(Loss) on account of fluctuations in foreign currency rates

6. Details of amount Capitalised during the year to Fixed Assets

7. The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at March 31, 2016. The disclosure pursuant to the said Act is as under

(a) Recognized in Profit and Loss Account



105


(H in ‘000)



Profit used as Numerator for calculating Earnings per Share (104,028.28) (81,438.80)

Weighted Average Number of Share used in computing BasicEPS 14,075,829 13,576,651

Number of Share used in computing Diluted EPS 14,892,267 14,892,267

Nominal Value per Share (In H) 10 10

Basic Earnings per Share (In H) (7.39) (6.00)

Diluted Earnings per Share (In H) (6.99) (5.47)

Key Management Personnel Mr. Babulal S. Sanghvi

Mr. Jayantilal 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 Key Management Personnel or their Relatives

Babulal Sanghvi (HUF)

Jayantilal Sanghvi (HUF)

Naresh Sanghvi (HUF)

Vikram Sanghvi (HUF)

Babulal Sanghvi (HUF))

Gautam Stainless Pvt. Ltd.


8. Computation of Earnings per Share (EPS)

9. Related Party Details

(a) Related Party Disclosures



(H in ‘000)Particulars Key Management Personnel Relative of Key Management

PersonnelEnterprises under

Significant Influence of Key management Personnel or

their Relatives

Total

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

Purchase of Goods/DEPB - - - - 4,424.64 - 4,424.64 -

Gautam Stainless Pvt. Ltd. - - - - 4,424.64 - 4,424.64 -

Receiving of Services - - - - 25.54 347.97 25.54 347.97

Gautam Stainless Pvt. Ltd. - - - - 25.54 347.97 25.54 347.97

Sale of Goods - - - - 86.29 1,189.10 86.29 1,189.10

Gautam Stainless Pvt. Ltd. - - - - 86.29 1,189.10 86.29 1,189.10

Interest paid - - - - 190.75 - 190.75 -

Gautam Stainless Pvt. Ltd. - - - - 190.75 - 190.75 -

Loans - Repaid / Converted 37,775.00 20,385.00 4,523.94 2,695.00 3,539.08 4,750.00 45,838.02 27,830.00

Babulal S. Sanghvi 9,137.50 5,218.75 - - - - 9,137.50 5,218.75

Jayantilal B. Sanghvi 11,317.50 4,718.75 - - - - 11,317.50 4,718.75

Naresh B. Sanghvi 8,537.50 4,853.75 - - - - 8,537.50 4,853.75

Vikram B. Sanghvi 8,782.50 5,593.75 8,782.50 5,593.75

Meena J. Sanghvi - - 4,163.94 750.00 - - 4,163.94 750.00

Kiran N. Sanghvi - - 360.00 150.00 - - 360.00 150.00

Sheetal V. Sanghvi - - - 1,650.00 - 1,650.00

Babulal Sanghvi (HUF) - - - - - 400.00 - 400.00

Jayantilal B. Sanghvi (HUF) - - - 145.00 - - 145.00

Naresh B. Sanghvi (HUF) - - - - 35.00 - 35.00 -

Vikram Sanghvi (HUF) - - - - 35.00 - 35.00 -


Loans - Received / Taken 39,371.00 43,125.00 6,675.00 4,450.00 39,615.75 8,260.00 85,661.75 55,835.00

Babulal Sanghvi 9,930.00 5,850.00 - - - - 9,930.00 5,850.00


Naresh B. Sanghvi 4,551.00 9,500.00 - - - - 4,551.00 9,500.00

Vikram B. Sanghvi 13,250.00 11,425.00 - - - - 13,250.00 11,425.00

BhamriDevi B. Sanghvi - - 500.00 - - - 500.00 -

Meena J. Sanghvi - - 500.00 3,500.00 - - 500.00 3,500.00

Kiran N. Sanghvi - - 4,275.00 500.00 - - 4,275.00 500.00

Sheetal V. Sanghvi - - 1,400.00 450.00 - - 1,400.00 450.00

Babulal Sanghvi (HUF) - - - - 1,825.00 - 1,825.00 -

Jayantilal Sanghvi (HUF) - - - - 9,400.00 955.00 9,400.00 955.00

Naresh Sanghvi (HUF) - - - - 10,800.00 2,165.00 10,800.00 2,165.00

Vikram Sanghvi (HUF) - - - - 6,250.00 790.00 6,250.00 790.00


Interest Expenses - - - - - - - -

Rental Paid 36.00 36.00 180.00 180.00 - - 216.00 216.00

BhamriDevi B. Sanghvi - - 180.00 180.00 - - 180.00 180.00

Jayantilal B. Sanghvi 36.00 36.00 - - - - 36.00 36.00

Director's Remuneration 8,304.66 7,045.77 - - - - 8,304.66 7,045.77

(b) Related Party Transaction




107


(b) Related Party Transaction(H in ‘000)

Particulars Key Management Personnel Relative of Key Management Personnel

Enterprises under Significant Influence of Key management Personnel or

their Relatives

Total

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

March, 312016

March, 312015

Balance Outstanding - (Receivables)/Payables (Net)

Loans & Advances 38,390.21 36,794.21 10,628.17 8,477.12 45,237.44 9,477.44 94,255.82 54,748.76

Babulal S. Sanghvi 1,957.10 1,164.60 - - - - 1,957.10 1,164.60


Naresh B. Sanghvi 6,652.09 10,638.59 - - - - 6,652.09 10,638.59

Vikram B. Sanghvi 16,118.70 11,651.20 - - - - 16,118.70 11,651.20

BhamriDevi B. Sanghvi - - 2,622.30 2,122.30 - - 2,622.30 2,122.30

Meena J Sanghvi - - 500.00 4,163.94 - - 500.00 4,163.94

Kiran N Sanghvi - - 5,289.74 1,374.74 - - 5,289.74 1,374.74

Sheetal V Sanghvi - - 2,216.14 816.14 - - 2,216.14 816.14

Babulal Sanghvi (HUF) - - - - 1,825.00 - 1,825.00 -

Jayantilal Sanghvi (HUF) - - - - 12,732.51 3,477.51 12,732.51 3,477.51

Naresh Sanghvi (HUF) - - - - 14,211.77 3,446.77 14,211.77 3,446.77

Vikram Sanghvi (HUF) - - - - 8,768.16 2,553.16 8,768.16 2,553.16

Gautam Stainless Pvt. Ltd. - - - - 7,700.00 - 7,700.00 -

Trade Payable / Receivable - - - - 3,431.81 789.78 3,431.81 789.78

Gautam Stainless Pvt. Ltd. (Vendor) - - - - 3,350.17 112.59 3,350.17 112.59

Gautam Stainless Pvt. Ltd. (Customer) - - - - 81.63 677.19 81.63 677.19

Personal Guarantee Given to Bank against Working capital & Term loan outstanding Amount.


(H in ‘000)



Contribution to Provident Fund 2,593.55 1,925.80

10. Contributions are made to Recognized 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 recognized as expense in respect of

these defined contribution plans, aggregate to H2,593.55 Thousands (Previous Year H1,925.80 Thousands)

In respect of Gratuity, Contributions are made to LIC’s Recognized Group Gratuity Fund Scheme based on amount

demanded by LIC of India. Provision for Gratuity is based on actuarial valuation carried 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.




(H in ‘000)



Reconciliation of liability recognized in the Balance Sheet Present value of commitments (as per Actuarial Valuation) 1304.60 838.56Fair value of plan assets (1378.22) (999.88)Net (liability) / asset in the Balance sheet (73.62) (161.32)Movement in net liability recognized in the Balance sheet Net liability as at the beginning of the year 161.32 76.20Net expense recognized in the Profit and Loss account (457.93) (221.76)Contribution during the year 370.23 306.88Net (liability) / asset in the Balance sheet 73.62 161.32Expense recognized in the Profit and Loss account Current Service cost 530.19 302.91Interest cost 64.57 43.93Expected return on plan assets (92.74) (68.75)Actuarial (gains)/ losses (44.08) (56.33)Expense charged to the Profit and Loss account 457.94 221.76Return on plan assetsExpected return on plan assets 92.74 68.75Actuarial gains/ (losses) (33.22) (8.01)Actual return on plan assets 59.52 60.74Reconciliation of defined-benefit commitmentsCommitments as at the beginning of the year 838.56 556.07Current service cost 530.19 302.90Interest cost 64.57 43.93Paid benefits (51.42) (0.00)Actuarial (gains)/ losses (77.30) (64.34)Commitments as at the year end 1304.60 838.56Reconciliation of plan assetsPlan assets as at the beginning of the year 999.88 632.27Expected return on plan assets 92.74 68.74Contributions during the year 370.23 306.88Paid benefits (51.42) 0.00Actuarial gains/ (losses) (33.22) (8.01)Plan assets as at the year end 1378.21 999.88The 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

requirements and expenseDiscount rate 7.70% 7.90%Expected return on plan Assets 8.00% 8.75%Expected rate of salary increase 8.00% 8.00%

Category of Plan Assets: The Company’s Plan Assets in respect of Gratuity are funded through the Group Scheme of

the LIC of India



109



11. 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 H584.70 thousands (P.Y. H907.63 Thousands).

(H in ‘000)

Particulars Domestic Export TotalSegment Revenue (Net) For the Year ended

March 31,2016

502290.24 199291.42 701581.66

Segment Revenue (Net) For the Year ended

March 31,2015

706322.63 154120.96 860443.59

13. Company has received H52.61 Lakh which is credited to Profit & Loss Account from MGVCL towards rebate of Electricity

Duty for the year 2013-14 & 2014-15.

12. 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 reportablesegment of

Domestic Sales and Export Sale

(H in ‘000)

Sr. Particulars Rate of Interest Repayment Termsi Term Loan I - INR 2.90 % above BR i.e

12.20% p.a.

84 structured monthly installment from August2015

Ii WCTL- INR 2.90 % above BR i.e

12.20% p.a

84 structured monthly installment from August 2015

Iii Term Loan – ECB / USD 324 bps over LIBOR 26 quarterly installments from August 2012. (Default in


H10786 (P.Y. H10177) and Nil (P.Y. H1429) respectively)

Iv Term Loan II - INR 2.90 % above BRi.e

12.20% p.a.

26 quarterly installments from August 2012. (Default in


H17510 (P.Y. H941) and `25100 (P.Y.H338) respectively)

14. Terms and Conditions of Loans From Banks:- [Refer Notes 2.4 (a)(i)]



15. Terms and Conditions of Unsecured Loan: Repayment terms – Repayable after 3 years and Interest at 0 to 12 %.

16. Previous financial year’s figures have been regrouped wherever necessary to make them comparable with those of

the current year.

17. The subsidiary company is incorporated in Netherland on 27th of May 2014. The financial of the subsidiary end on 31st

December and the financial statements of the said subsidiary are not mandatorily required to be audited under Dutch

law; hence un-audited financials are only consolidated. The said accounts are certified by management and relied

upon by the auditors.






(H in ‘000)

Particulars Net Assets(i.e. Total assets minus total liabilities)

Share in profit/(loss)

As a % of consolidated

net assets

Amount As a % of consolidated profit/(loss)

Amount

1.Parent

Sanghvi Forging And Engineering Limited 100.89 439,904.87 96.00 (99,870.14)

2. Subsidiary(Foreign)

Sanghvi Europe B.v. 0.19 821.17 (0.53) 549.32

Add/(Less)Inter- company Eliminations (1.08) (4,689.79) 4.53 (4,707.46)

Total 100% 436,036.24 100% (104,028.28)

18. Disclosure in terms of Schedule III of the Companies Act, 2013

about us 02

Message from the Chairman 04

Financial Highlights 2015-16 06

Our Journey 07

Our Core Competencies 08

Corporate information 09

Management Discussion and analysis 10

board’s report 15

Corporate Governance report 37

Standalone Financial Statements 54

Consolidated Financial Statements 84

aCrOSS tHe pages

DisclaimerWe have exercised utmost care in the preparation of this report. it contains forecasts and/or information relating to forecasts. Forecasts are based on facts, expectations, and/or past figures. as with all forward-looking statements, forecasts are connected with known and unknown uncertainties, which may mean the actual results may deviate significantly from the forecast. Forecasts prepared by the third parties, or data or evaluations used by third parties and mentioned in this communication, may be inappropriate, incomplete, or falsified. We cannot assess whether information in this report has been taken from third parties, or these provide the basis of our own evaluations, such use is made known in this report. as a result of the above-mentioned circumstances, we can provide no warranty regarding the correctness, completeness, and up-to-date nature of information taken, and declared as being taken, from third parties, as well as for forward-looking statements, irrespective of whether these are derived from third parties or ourselves. readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Building a SuStainableFuture

AnnuAl RepoRt 2015-16

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1

Head Office: A-8, Parvati Chamber, Opp. Apsara Cinema, Pratapnagar Road, Vadodara 390004

Ph: 0265-2580644/2581658 Fax: 0265-2581126

Registered Office: 244/6-7, G.I.D.C. Industrial Estate, Waghodia-391760 Dist. Vadodara,

Ph:02668-673100 Fax: 02668-673135

Email :[email protected] Web : www.sanghviforge.com

CIN : L28910GJ1989PLC012015

NOTICENOTICE is hereby given that the Twenty-Eighth Annual General Meeting of the Members of the SANGHVI FORGING AND

ENGINEERING LIMITED will be held on Tuesday, 27th September, 2016 at 5:00 p.m.at the Registered Office of the Company

situated at 244/6-7, GIDC Industrial Estate, Waghodia, Dist. Vadodara 391 760 to transact the following business :

ORDINARY BUSINESS:1. To receive, consider and adopt the audited Standalone and Consolidated Financial Statement of the Company for the

financial year ended March 31, 2016, and the Reports of the Board of Directors and the Auditors thereon and in this

regards pass following resolution as an ordinary resolution.

“RESOLVED THAT the Audited Standalone and Consolidated financial statement of the company for the financial

year ended March 31, 2016 and the report Board of Directors and Auditors thereon, be and is hereby considered and

adopted”.

2. To appoint a Director in place of Shri Vikram Babulal Sanghvi (DIN: 00291940), who retires by rotation and being

eligible, offers himself for reappointment and in this regards pass following resolution as an ordinary resolution.

“RESOLVED THAT pursuant to provisions of Section 152 of the Companies Act, 2013, Shri Vikram Babulal Sanghvi

(DIN:-00291940), who retires by rotation at this meeting and being eligible offered himself for re-appointment, be

and is hereby re-appointed as a Director of the Company, liable to retire by rotation”.

3. To ratify appoint of the Statutory Auditors and to fix their remuneration and in this connection to consider and if

thought fit, to pass, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the

Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and other applicable rules, if any, M/s

Shah & Bhandari, Chartered Accountants, (Registration No. 118852W), Vadodara, earlier appointed at Annual General

Meeting held on September 26, 2014 until the conclusion of the Twenty-Ninth Annual General Meeting, be and is

hereby ratified and the board of directors of the company be and is hereby authorized to fix their remuneration plus

service tax, out of pocket and travelling expenses etc., as may be mutually agreed between the Board of Directors of

the Company”.

SPECIAL BUSINESS:4. To consider and if thought fit, to pass the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 73 of the Companies Act, 2013 read with the Companies

(Acceptance of Deposits) Rules, 2014 and other applicable provisions, if any, and in accordance with the applicable

provisions of Foreign Exchange Management Act, 1999 (the “FEMA”), and any other Applicable Laws, Regulations,

Policies or Guidelines, and subject to the approval, consent, permission and sanction to the extent necessary of

any authorities, as maybe necessary, including the approval of the Government of India, the Reserve Bank of India,

Registrar of Companies and all other concerned statutory and other authorities and to the extent necessary, consent

of the members of the Company be and is hereby accorded to invite/ accept/ renew from time to time unsecured/

secured deposits from members of the Company upto permissible limits as prescribed under Companies (Acceptance

of Deposits) Rules, 2014.

2

NOTES

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING (the “Meeting”) IS ENTITLED

TO APPOINT A PROXY TO ATTEND AND VOTE ON A POLL INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A

MEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING PROXY SHOULD BE LODGED WITH THE COMPANY AT

ITS REGISTERED OFFICE NOT LATER THAN 48 (FORTY EIGHT) HOURS BEFORE COMMENCEMENT OF THE MEETING.

A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten

percent of the total share capital of the Company carrying voting rights. A member holding more than ten percent of

the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person

shall not act as a proxy for any other person or shareholder.

2. Members/ Proxies should bring their Attendance Slip duly filled and signed mentioning the details of their DP ID and

Client Id/folio Number and also bring valid ID Proof at the time of the Meeting.

3. Corporate Members intending to send their authorized representative to attend the meeting pursuant to Section 113

of Companies Act, 2013 are requested to send to the Company, a certified true Copy of the relevant Board Resolution

together with their respective specimen signatures authorizing their representative(s) to attend and vote on their

behalf at the meeting.

4. The Explanatory Statement, pursuant to Section 102 of Companies Act, 2013, relating to the Special Business

enumerated under item No. 4 of the accompanying notice is annexed hereto.

5. The Profile of the Director Seeking re-appointment under item No. 2 of accompanying notice, as required by SEBI

(Listing Obligations and Disclosures Requirements) Regulations, 2015 is as below

Name of Director Shri Vikram Babulal Sanghvi

Age 33 years

Date of Appointment on the Board April 01,2010

Qualification gold medalist from Sardar Patel University in Bachelor of Business

Administration, Master degree in Business Administration from

the ICFAI University and has done CFA from ICFAI University

Expertise and portfolio handled He has over 11 years of experience in the field of forging

industry. He is looking after overall supervision of the operations

and administration activities in the Company

Directorship in other companies as on March

31, 2016

Rajeshwari Forging Private Limited

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors be and is hereby

authorised to do such acts, deeds, things and matters as the Board of Directors may in its absolute discretion consider

necessary or appropriate for such invitation/ acceptance / renewal of Deposits by the Company”.

By Order of the Board of Directors

For Sanghvi Forging & Engineering Ltd.

S/d

Keval Thakkar

Vadodara, Date August 12, 2016 Company Secretary

Registered Office : ICSI Membership No.:- A39127

244/6 & 7, GIDC Industrial Estate, e-mail : [email protected]

Waghodia, Dist. Vadodara 391 760 Web :www.sanghviforge.com

CIN : L28910GJ1989PLC012015 Ph:02668-673100

Fax: 02668-673135

3

Chairman/Membership of other committees of

Company as on March 31, 2016

Sanghvi Forging & Engineering Limited Audit Committee –

Member

Terms and conditions of Re-appointment As per the resolution passed by Shareholders at the Annual General

Meeting held on September, 29, 2015 in which Sri Vikram Sanghvi

was re-appointed as a Whole-time Director of the Company.

Remuneration last Drawn 20.47 Lakhs

Remuneration Proposed As per the Excising terms and conditions

Shareholding as on March, 31, 2016 1505682 Equity Shares

Relationship with Directors Inter-se Relative of Shri Babulal S. Sanghvi Jayantilal B Sanghvi and

Naresh B. Sanghvi

6. The Register of Members and the Share Transfer Books of the Company will remain closed from Tuesday, September

20, 2016 to Tuesday, September 27, 2016 (both days inclusive).

7. Members holding shares in physical form are requested to notify the Company of any change in their addresses so

as to enable the Company to address future communication to their correct addresses. Members holding shares in

demat form are requested to notify their respective Depository Participant of any change in their addresses.

8. Members are requested to bring their copies of the Annual Report to the Meeting and Members desiring any

information as regards the Accounts are requested to write to the Company Secretary at an early date so as to enable

the Management to reply at the Meeting.

9. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN)

by every participant in securities market. Members holding shares in electronic form are, therefore, requested to

submit their PAN to their Depository Participants with whom they are maintaining their demat accounts. Members

holding shares in physical form can submit their PAN to the Company.

10. Members who have not registered their e-mail addresses so far are requested to register their e-mail address for

receiving all communication including Annual Report, Notices, Circulars, etc. from the Company electronically.

11. Electronic copy of the Annual Report for Financial Year 2015-16 is being sent to all the members whose email IDs

are registered with the Company/Depository Participants(s) for communication purposes unless any member has

requested for a hard copy of the same.

12. Members who have not registered their email address, physical copies of the Notice of the 28th Annual General

Meeting of the Company inter alia indicating the process and manner of e-voting along with Attendance Slip and

Proxy Form is being sent in the permitted mode.

13. Members may also note that the Notice of the 28th Annual General Meeting and the Annual Report for the

F.Y. 2015-16 will also be available on the Company’s website www.sanghviforge.com for their download. The

physical copies of the aforesaid documents will also be available at the Company’s Registered Office in Waghodia,

Vadodara for inspection during normal business hours on working days. Even after registering for e-communication,

members are entitled to receive such communication in physical form, upon making a request for the same, by post

free of cost. For any communication, the shareholders may also send requests to the Company’s investor email id:

[email protected].

14. Voting through electronic In compliance with provisions of Section 108 of the Companies Act, 2013 and read with the Companies (Management

and Administration) Rules, 2014 as amended, and Regulation 44 of the SEBI ( Listing Obligations and Disclosure

Requirements) Regulation 2015 the Company is pleased to provide Members holding shares either in physical form or

in dematerialized form the facility to exercise their right to vote at the General Meeting by electronic means and the

business may be transacted through e-voting services provided by Central Depository Services (India) Limited (CDSL)

accordingly members may exercise his/her vote by electronic means through electronic voting system.

Shri S. Samdani, Practicing Company Secretary failing him Shri Suresh kumar Kabra, Practicing Company Secretary

4

of Samdani Shah & Associates has been appointed as the Scrutinizer to scrutinize the e-voting process in a fair and

transparent manner.

The instructions for members for voting electronically are as under:- (i) The voting period begins on Saturday September 24, 2016 (09:00 a.m.) and ends on Monday September 26,

2016 (05:00 p.m.) During this period shareholders’ of the Company, holding shares either in physical form or in

dematerialized form, as on the cut-off date i.e Tuesday September 20, 2016 may cast their vote electronically.

The e-voting module shall be disabled by CDSL for voting thereafter.

(ii) Log on to the e-voting website www.evotingindia.com

(iii) Click on Shareholders

(iv) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(v) Next enter the Image Verification as displayed and Click on Login.

(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier

voting of any company, then your existing password is to be used.

(vii) If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric PAN issued by Income Tax Department

(Applicable for both demat shareholders as well as physical shareholders)

• Members who have not updated their PAN with the Company/Depository

Participant are requested to use the first two letters of their name and the

8 digits of the sequence number (refer serial no. printed on the name and

address sticker/Postal Ballot Form/mail) in the PAN field.

• In case the sequence number is less than 8 digits enter the applicable number

of 0’s before the number after the first two characters of the name in CAPITAL

letters. E.g. If your name is Ramesh Kumar with serial number 1 then enter

RA00000001 in the PAN field.

Dividend Bank Details

OR Date of Birth (DOB)

Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as

recorded in your demat account or in the company records in order to login.

• If both the details are not recorded with the depository or company please

enter the member id / folio number in the Dividend Bank details field as

mentioned in instruction (iv).

(viii) After entering these details appropriately, click on “SUBMIT” tab.

(ix) Members holding shares in physical form will then reach directly the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

5

(xi) Click on the EVSN for the Company i.e. Sanghvi Forging & Engineering Limited.

(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xvii) If Demat account holder has forgotten the changed password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

(xviii) Shareholders can also cast their vote using CDSL’s mobile app m-Voting available for android based mobiles. The m-Voting app can be downloaded from Google Play Store. Apple and Windows phone users can download the app from the App Store and the Windows Phone Store respectively on or after 30th June 2016. Please follow the instructions as prompted by the mobile app while voting on your mobile.

(xix) Note for Non – Individual Shareholders and Custodians

• Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporates.

• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].

• After receiving the login details a Compliance User should be created using the admin login and password. The Compliance User would be able to link the account(s) for which they wish to vote on.

• The list of accounts linked in the login should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.

• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

(xx) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email to [email protected].

In case of members receiving the physical copy:

(A) Please follow all steps from sl. no. (i) to sl. no. (xix) above to cast vote.

(B) The voting period begins on <Date and Time> and ends on <Date and Time>. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) of <Record Date>, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

(C) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com under help section or write an email to [email protected].

The Scrutinizer shall within a period not exceeding three (3) working days from the conclusion of the general meeting unblock the votes in the presence of at least two (2) witnesses not in the employment of the Company and make a Consolidated Scrutinizer’s Report of the votes cast in favour or against, if any, forthwith to the Chairman of the Company.

6

1. The Results shall be declared at the AGM of the Company or thereafter. This Notice as well as the Results declared alongwith the Scrutinizer’s Report shall be placed on the Company’s website and on the website of CDSL and communicated to the NSE and BSE.

2. The facility for voting, either through electronic voting system or ballot or polling paper shall be available at the meeting and members attending the meeting who have not already cast their vote by remote e-voting shall be able to exercise their right at the meeting.

3. The members who have cast their vote by remote e-voting prior to the meeting may also attend the meeting but shall not be entitled to cast their vote again.

15. All documents referred to in the accompanying Notice and the Explanatory Statement shall be open for inspection at the Registered Office of the Company during normal business hours (9.00 am to 5.00 pm) on all working days up to and including the date of the Annual General Meeting of the Company.

EXPLANATORY STATEMENT (PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013)

Item No. 4The Board of Directors at their meeting held on August 12, 2016, have in-principle approved and recommended the

invitation and acceptance of Deposits from the members pursuant to Sections 73 of the Companies Act, 2013 and

Companies (Acceptance of Deposits) Rules, 2014 including any statutory modification(s) or re-enactment thereof for the

time being in force as one of the modes to meet the ongoing fund requirements of the Company.

The Company upon obtaining approval of the shareholders will proceed to comply with the requirements stipulated under

Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, before inviting /

accepting / renewing deposits.

The Board of Directors of your Company recommends the resolution as set out in the accompanying notice for the approval

of the members of the Company.

None of the Directors or Key Managerial Personnel of the Company or their relatives is concerned or interested in the

Resolution except to the extent of their deposit holding and / or their shareholding in the Company, if any.

By Order of the Board of Directors

For Sanghvi Forging & Engineering Ltd.

S/d

Keval Thakkar

Vadodara, Date August 12, 2016 Company Secretary

Registered Office : ICSI Membership No.:- A39127

244/6 & 7, GIDC Industrial Estate, e-mail : [email protected]

Waghodia, Dist. Vadodara 391 760 Web :www.sanghviforge.com

CIN : L28910GJ1989PLC012015 Ph:02668-673100

Fax: 02668-673135

7

ATTENDANCE SLIP

Annual General Meeting on Tuesday, September 27, 2016 at 5:00 p.m.I /We hereby record my presence at the Annual General Meeting of the Company at Registered Office of the Company situated at 244/6-7, G.I.D.C. Industrial Estate, Waghodia-391760 Dist. Vadodara, Gujarat

Folio No./ DP ID & Client ID No. _______________________________________ No. of Shares Held ________________________

Name of Member ___________________________________________________ Signature ________________________________

Name of Proxy holder _______________________________________________ Signature ________________________________

Important Note Members/Proxy holders are requested to bring the Attendance Slip with them when they come to the meeting and hand it over at the gate after affixing their signature on it.

MGT-11

PROXY FORM[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3)of the Companies

(Management and Administration) Rules, 2014]

I/We, being the member(s) of ____________________________________________________ shares of the above named company, hereby appoint

1. Name : ___________________________________________________________________________________________________ Address:__________________________________________________________________________________________________ E-mail Id :___________________________________________ Signature: ______________________________, or failing him

2. Name : ___________________________________________________________________________________________________ Address:__________________________________________________________________________________________________ E-mail Id :___________________________________________ Signature: ______________________________, or failing him

3. Name : ___________________________________________________________________________________________________ Address:__________________________________________________________________________________________________ E-mail Id :___________________________________________ Signature: ___________________________________________

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Annual General Meeting of the company, to be held on Tuesday, September 27, 2016 at 5:00 p.m. at the Registered Office of the Company situated at 244/6-7, G.I.D.C. Industrial Estate, Waghodia-391760 Dist. Vadodara, Gujaratand any adjournment thereof in respect of such resolutions as are indicated below:

Name of the member(s)

Registered address

E-mail Id

Folio No/Client Id& DP ID


Ph: 0265-2580644/2581658, Fax: 0265-2581126


Ph:02668-673100, Fax: 02668-673135

Email :[email protected], Website : www.sanghviforge.com

CIN : L28910GJ1989PLC012015

8

Attention Members!Arrangements have been made for transport to and from the registered office of the Company so as to make it convenient for the Members to attend the 28th Annual General Meeting schedule to be held on Tuesday, September 27, 2016 at 5:00 p.m.

• Pick-up time will be 4:00 p.m. on Tuesday, September 27, 2016 and Route for Pick-up Location will be starts from Pandya Bridge to Fatehgunj Circle to Airport Circle to Sardar Estate to Waghodia Crossing to Registered office of the Company.

• In case Member wish to avail this facility, they are requested to register their availability and above mentioned pick-up locations by calling on ph no. 02668-673100and e-mail at [email protected] 10:00 a.m. to 5:00 p.m. before September 26, 2016.

• Your Cooperation in this regard is highly solicited as this will help to ensure that the Company is able to effectively service from pick-up locations.

• Members are requested to arrive at the pick-up location well in advance so that they can reach at the Registered office of the Company prior to the meeting.

• Company Pick-up Vehicle available in the name of the Company “SANGHVI FORGING AND ENGINEERING LIMITED” to enable the Members to easily identify them.

• The return transport from the registered office of the Company shall follow the same route.

• Please be informed that no reimbursement shall be made for any expenses incurred to attending the meeting.

Resolution No. Description

1 Adoption of Standalone and Consolidated Audited Financial Statements of the Company for the year ended 31 March, 2016 including audited Balance Sheet as at 31 March, 2016 and the Statement of Profit & Loss for the year ended on that date and the reports of the Board of the Directors and Auditors there on.

2 Appointment of a Director in place of Shri Vikram Babulal Sanghvi (DIN: 00291940), who retires by rotation and being eligible, offers him self for reappointment.

3 Ratification of the appointment of M/s Shah & Bhandari, Chartered Accountants, (Registration No. 118852W), Vadodara be Auditors of the Company and to fix their remuneration.

4 To invite/ accept/ renew from time to time unsecured/ secured deposits from members of the Company up to permissible limits as prescribed under Companies (Acceptance of Deposits) Rules, 2014.

Affix a Revenue

Stamp of H1/-

Signed this _________ day of _____________________ 2016

Signature of shareholder ________________________ Signature of Proxy holder(s) ____________________________________

Note:1. This form of proxy in order to be effective should be duly completed and submitted at the Registered Office of the

Company, not less than 48 hours before the commencement of the Meeting .

2. For the resolutions, Explanatory Statement and Notes please refer notice of the Annual General Meeting.

9

Sr. No. Particulars Details

1. Name of the first Named Shareholder (In block letters)

2. Postal address

3. Registered folio No. / *Client ID No. (*Applicable to

investors holding share in dematerialized form)

4. Class of Share

Item No.

Description No. of EquityShares held by me

I Assent tothe Resolution (YES)

I Dissent from the Resolution(NO)

1 Adoption of Standalone and Consolidated Audited Financial Statements of the Company for the year ended 31 March, 2016 including audited Balance Sheet as at 31 March, 2016 and the Statement of Profit& Loss for the year ended on that date and the reports of the Board of the Directors and Auditors thereon.

2 Appointment of a Director in place of Shri Vikram Babulal Sanghvi (DIN: 00291940), who retires by rotation and being eligible, offers himself for reappointment.

3 Ratification of the appointment of M/s Shah & Bhandari, Chartered Accountants, (Registration No. 118852W), Vadodara be Auditors of the Company and to fix their remuneration.

4 To invite/ accept/ renew from time to time unsecured/ secured deposits from members of the Company up to permissible limits as prescribed under Companies (Acceptance of Deposits) Rules, 2014.


Ph: 0265-2580644/2581658, Fax: 0265-2581126


Ph:02668-673100, Fax: 02668-673135

Email :[email protected], Website : www.sanghviforge.com

CIN : L28910GJ1989PLC012015

Form No. MGT- 12[Pursuant to section 109(5) of the Companies Act, 2013 and rule 21(1)(c) of the Companies

(Management and Administration Rules, 2014]

BALLOT PAPER

I hereby exercise my vote in respect of Ordinary / Special resolution enumerated below by recording my assent or dissent to the said resolution in the following manner:

Place:

Date: (Signature of the Shareholder)

10

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