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Sanghvi Forging & Engineering Ltd.

BSE: 533411 Sector: Engineering
NSE: SANGHVIFOR ISIN Code: INE263L01013
BSE 00:00 | 13 Jul 26.10 -0.10
(-0.38%)
OPEN

24.50

HIGH

28.30

LOW

24.50

NSE 00:00 | 13 Jul 26.25 -0.35
(-1.32%)
OPEN

26.60

HIGH

26.85

LOW

25.75

OPEN 24.50
PREVIOUS CLOSE 26.20
VOLUME 3336
52-Week high 47.75
52-Week low 23.85
P/E
Mkt Cap.(Rs cr) 39
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 24.50
CLOSE 26.20
VOLUME 3336
52-Week high 47.75
52-Week low 23.85
P/E
Mkt Cap.(Rs cr) 39
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sanghvi Forging & Engineering Ltd. (SANGHVIFOR) - Auditors Report

Company auditors report

To the Members of

SANGHVI FORGING & ENGINEERING LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of SANGHVI FORGING& ENGINEERING LIMITED (“the Company”)which comprise the Balance sheet as atMarch 31 2017 and the Statement of Profit and Loss the Cash flow Statement for the yearthe ended and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the companies Act 2013(“the Act”) with respect to the preparation andpresentation of these standalone financial statements of Company that give a true and fairview of the financial position and financial performance and cash flows of the company inaccordance with the Accounting principles generally accepted in India includingaccounting Standards specified u/s 133 ofthe Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility includes maintenance of adequate accountingrecords in accordance with the provision of the Act for safeguarding the assets of thecompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the act and the rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified u/s143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the standalonefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the company's preparation of the financialstatements that give true and fair view in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion onwhether the Company has in place an adequate internal financial controls system overfinancial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by management as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the companyas at March 31 2017 and its statement of loss and its cash flows for the year ended onthat date.

Report on Other Legal and Regulatory Requirements

1. 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 ofthe Act we give in the “Annexure A” a statement on the matters specified inparagraphs 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 ourknowledge 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 thecompany so far as appears from our examination of those books;

c. The Balance SheetStatement of Profit and Loss and cash flow statement dealt with bythis Report are in agreement with the books of account;

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards referred to in Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 (as amended);

e. On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of section 164(2) of theAct.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in “Annexure B”; and

g. With respect to the matter to be included in the Auditor's report in accordance withRule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the bestof our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition

in Note 2.25(1A) of the standalone financial statements.

ii. The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

iii. There is no such amount which is required to be transfer to the Investor educationand protection fund by the Company.

iv. The Company has provided requisite disclosures in the standalone financialstatements as to holding as well as dealings in Specified Bank Notes during the periodfrom November 8 2016 to December 30 2016 on the basis of information available with theCompany. Based on audit procedures and relying on management's representation we reportthat disclosures are in accordance with the books of accounts maintained by the Companyand as produced to us by the Management. - Refer Note 2.25(16).

For SHAH & BHANDARI
Chartered Accountants
FRN No.: 118852W
(Yogesh Bhandari)
Place: Vadodara Partner
Date: May 29 2017 M.No.046255

“Annexure A” To The Auditor's Report

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

(b) As explained to us fixed assets are physically verified by the management at theyear-end which in our opinion is reasonable looking to the size of the company and itsnature 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 ourexamination of the records of the Company the company have lease hold rights of factoryland and building thereon in terms of Lease Deeds.

ii. (a) Inventories have been physically verified by management at reasonable intervalsduring the year. The discrepancies noticed on such verification were not material and havebeen adjusted in the books of account of the Company.

iii. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act. Henceclause 3(iii) of the Order is not applicable to the company.

iv. In our opinion and according to the information and explanation given to us andbased on the legal opinion obtained by the Company the Company has not granted any loansor provided any guarantees or security to the parties covered under Section 185 & 186of the Act.

v. The Company has not accepted any deposits during the year from the public within themeaning of sections 73 & 74 of the Act and the rules framed there under to the extentnotified.

vi. We have broadly reviewed the cost records maintained by the Company pursuant toRules prescribed by the Central Government under Section 148(1) of the Act and are of theopinion that prima-facie the prescribed cost records have been maintained and are beingmade up. We have however not made a detailed examination of the cost records with a viewto determine whether they are accurate or complete.

vii. (a) The company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance sales-tax service tax duty ofcustoms duty of excise value added tax or cess dues with the appropriate authoritiesexcept TDS which is deposited after few months. There are no undisputed amounts payable asat 31.03.2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us dues of income-taxsales tax service tax excise duty customs duty which have not been deposited on accountof any dispute are as follows:

Name of Statue Nature of Dues Amount ('000) Period to which it relates (FY) Forum where the dispute is pending
Income Tax Act 1961 Income Tax 5282.61 2010-11 ITAT Ahmedabad
2011-12
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 usby management the company has defaulted in repayment of its loan and interest to thebanks. Estimated instalments and interest due but not paid to banks as at March 31 2017aggregated to '96491596/- & interest thereon '92367396/- since JULY 2016 (P.Y.'28296000 & Interest thereon of '25100000/- since January 2016).

ix. According to the information and explanations given to us the term loan wasapplied for the purpose for which they were obtained.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals 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 theCompany is not of a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii. In our opinion and according to the information and explanations given to us alltransactions with the related parties are in compliance with Section 188 and 177 ofCompanies Act 2013 and are disclosed in the financial statement as required by relevantAccounting Standards

xiv. According to the information and explanations given to us The Company does nothave made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. Accordingly paragraph 3(xiv) of the Order is notapplicable.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into noncashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For SHAH & BHANDARI
Chartered Accountants
FRN No.: 118852W
(Yogesh Bhandari)
Place: Vadodara Partner
Date: May 29 2017 M. No. 046255

“Annexure B” To The Auditor's Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of SANGHVIFORGING & ENGINEERING LIMITED as of March 31 2017 in conjunction with our auditof the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls over Financial Reporting (the“Guidance Note”) and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For SHAH & BHANDARI
Chartered Accountants
FRN No.: 118852W
(Yogesh Bhandari)
Place: Vadodara Partner
Date: May 29 2017 M.No.046255