The Company estimates the provisions that have present obligations as a result of past events, and it is probable that an outflow of resources will be required to settle the obligations. These provisions are reviewed at the end of each reporting date and are adjusted to reflect the current best estimates.
The Company uses significant judgement to disclose contingent liabilities. Contingent liabilities are disclosed when there is a possible obligation arising from past
events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are neither recognised nor disclosed in the financial statements.
Segments are identified based on the manner in which the Chief Operating Decision Maker ('CODM') decides about resource allocation and reviews performance. Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
The Company is primarily engaged in the business of providing cranes on rental basis. Further all the commercial operations of the Company are based in India (Refer Note 36). Performance is measured based on the management accounts as included in the internal management reports that are reviewed by the Company's chairman and Managing Director. Accordingly, there is no separate reportable segments.
As per our report of even date For and on behalf of the Board of Directors of
For M S K A & Associates Sanghvi Movers Limited
Chartered Accountants CIN: L29150PN1989PLC054143
Firm Registration No.:105047W
Nitin Manohar Jumani Rishi Sanghvi Sham Kajale
Partner Chairman & Managing Director Chief Financial Officer
Membership No: 111700 DIN: 08220906 PAN: AAUPK7774R
Rajesh Likhite Madhu Dubhashi
Company Secretary & Chief Compliance Officer Director
PAN: ABDPL6323M DIN: 00036846
Place: Pune Place: Pune Place: Pune
Date: May 16, 2024 Date: May 16, 2024 Date: May 16, 2024
(ii) Rights, preferences and restrictions attached to shares
Equity Shares: The Company has only one class of equity shares having par value of ' 2 per share. Each shareholder is entitled to one vote per share held. They entitles the holders to participate in dividends and dividend, if any declared is payable in Indian Rupees. The Board of Directors, in their meeting on May 16, 2024, proposed a final dividend of ' 6 per equity share for the year ended March 31, 2024 which is subject to approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act,2013.
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the group for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.
i) Saraswat Co-Opeartive Bank Limited ' 11,658.27 Lakhs ( March 31, 2023 : ' 6,016.84 Lakhs), carrying interest rate ranging from 9% to 9.35% ( March 31, 2023 : 9.35%) repayable in 1 to 54 monthly installments. Such loans are hypothecated against Plant & Equipment (13 Nos. Cranes) and registered mortgage on land and buildings at Tathawade.
ii) Kotak Mahindra Bank Limited ' 2,869.04 Lakhs (March 31, 2023 : ' 1,349.26 Lakhs ), carrying interest rate ranging from 7.27% to 7.30% (March 31, 2023 : 8.30%) repayable in 1 to 47 monthly installments. Such loans are hypothecated against Plant & Equipment (2 Nos. Cranes).
iii) HDFC Bank Limited ' 2,134.34 Lakhs (March 31, 2023 : ' Nil Lakhs), carrying interest rate 9.25% (March 31, 2023 : Nil ) repayable in 1 to 54 monthly or quarterly installments. Such loans are hypothecated against Plant & Equipment (4 Nos. Cranes).
iv) Indusind Bank Limited ' 3,429.14 Lakhs (March 31, 2023 : ' 1,368.41 Lakhs), carrying interest rate 9.90% (March 31, 2023 : 9.00% ) repayable in 1 to 57 monthly installments. Such loans are hypothecated against Plant & Equipment (2 No. Cranes).
v) Yes Bank Limited ' 1,465.23 Lakhs (March 31, 2023 : ' 1,825.36 Lakhs), carrying interest rate 7.75% (March 31, 2023 7.75% to 8.40%) repayable in 1 to 41 monthly installments. Such loans are hypothecated against Plant & Equipment (1 No. Cranes).
vi) Yes Bank Limited ' 492.17 Lakhs (March 31, 2023 : ' 650.20 Lakhs), carrying interest rate 8.40% (March 31, 2023 7.75% to 8.40% ) repayable in 1 to 32 monthly installments. Such loans are hypothecated against Plant & Equipment (33 No. Prime Movers).
vii) IDFC First Bank Limited ' 6,268.18 Lakhs (March 31, 2023 : ' 7,403.34 Lakhs), carrying interest rate ranging from 9.00% to 9.95% (March 31, 2023 8.90% to 9.00% ) repayable in 1 to 67 monthly installments. Such loans are hypothecated against Plant & Equipment (13 No. Crane and 9 No. boom inserts of cranes).
viii) ICICI Bank Limited ' 1,791.96 Lakhs (March 31, 2023 : Nil), carrying interest rate of 8.75% (March 31, 2023 : Nil) repayable in 1 to 48 monthly installments. Such loans are hypothecated against Plant & Equipment (7 No. Cranes).
iii) The Company participates in a supplier finance arrangement (SF) which is disclosed under borrowings under which its suppliers may elect to receive payment of their invoice from a bank by presenting the letter of credit for their receivable from the Company once due. Under the arrangement, a bank agrees to pay amounts to a participating supplier in respect of invoices owed by the Company and receives settlement from the Company at a later date. The principal purpose of this arrangement is to improve working capital position of the Company by obtaining additional financing.
The Company has derecognised the original liabilities to which the arrangement applies because the original liability was substantially modified on entering into the arrangement. From the Company's perspective, the arrangement extends payment terms beyond the normal terms agreed with other suppliers that are not participating. The difference between the cash price equivalent and total payment is charged as interest to profit and loss over the period. The Company has created security charge to the bank. The bank considers each letter of credit as drawdown on an existing line of credit. The Company therefore discloses the letter of credit given to suppliers within borrowings because the terms, nature and function of the payables has been significantly modified.
The payments to the bank are included within financing cash flows because they are not part of the normal operating cycle of the Company and their principal nature has been changed to financing.
The Company incurred ' 412.65 Lakhs (March 31, 2023'322.03 Lakhs) for the year ended towards expenses relating to short term leases and leases of low-value assets.
In accordance with the requirements of Ind AS - 24 'Related Party Disclosures', names of the related parties, related party relationship, transactions and outstanding balances including commitments where control exits and with whom transactions have taken place during reported periods are:
Rishi Sanghvi - Chairman & Managing Director Sham Kajale - Chief Financial Officer
Rajesh Likhite - Company Secretary and Chief Compliance Officer
Maithili Sanghvi - Non Executive Woman Director
Dara Damania - Non Executive Independent Director * (Upto March 31, 2024)
S. Padmanabhan - Non Executive Independent Director * (Upto March 31, 2024)
Pradeep Rathi - Non Executive Independent Director * (Upto March 31, 2024)
Dinesh Munot - Non Executive Independent Director * (Upto March 31, 2024)
Madhukar Kotwal - Non Executive Independent Director *
Madhu Dubhashi - Non Executive Independent Director *
Bhumika Batra - Non Executive Independent Director * (W.e.f. January 01, 2024)
Indraneel Chitale - Non Executive Independent Director * (W.e.f. December 26, 2023)
Mina Sanghvi - Mother of Rishi Sanghvi Niyoshi Sanghvi - Sister of Rishi Sanghvi
Sanghvi Movers Vietnam Co. Ltd., Vietnam (Upto February 27, 2024)
Sangreen Renewables Private Limited (w.e.f March 23, 2024)(Refer Note 52)
36 Segment reporting
The Company generates its revenue by providing cranes, trailers on hire and other ancillary services within in India.
The Chief Operating Decision Maker (CODM) reviews the operations of the Company as one operating segment. Hence no separate segment information has been furnished herewith.
Information about major customers
Company's significant revenues are derived from two customer (March 31, 2023 : two customer) contributing 10% of more to the company's revenue represented approximately ' 13,667.74 Lakhs (March 31, 2023 : ' 11,597.77 Lakhs) of the Company's total revenue from operations.
The fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, security deposits, interest accrued on fixed deposits, trade receivables, unbilled Receivables, loans, investments, trade payables, interest accrued but not due on borrowings, accrued employee liabilities, short-term borrowings Capital creditors, interest payable on unsecured Loans and other financial liabilities approximate the carrying amounts because of the short term nature of such financial instruments.
The amortised cost using effective interest rate (EIR) of non-current financial assets consisting of security deposits, fixed deposit accounts with maturity for more than 12 months from balance sheet date are not significantly different from the carrying amount.
Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The Company's principal financial liabilities comprise Borrowings and trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations and to support its operations. The Company's principal financial assets include investments, trade and other receivables, and cash and cash equivalents that derive directly from its operations.
The Company is exposed to various financial risks. These risks are categorised into market risk, credit risk and liquidity risk. The Company's risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates (if applicable).
Interest rate sensitivity
Since the long term debt obligations carry fixed interest rates, no risk is anticipated on account of interest rate changes
(C) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.
As described in Note 19, the Company also participates in a supplier finance arrangement (SF) with the principal purpose to improve working capital position of the Company by obtaining additional financing from banks with good credit ratings so the likelihood of the supplier finance arrangement becoming unavailable is remote.
As at March 31, 2024, the Company had a working capital of ' 16,941.56 Lakhs (March 31, 2023 : ' 9,915.71 Lakhs). The working capital of the Company for this purpose has been derived as follows:
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's financing activities (when borrowings are denominated in a different currency from the Company's functional currency).
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Company's trade receivables, receivables from deposits and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a month's operational costs. The Management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The maximum exposure to the credit risk as at the reporting period is primarily from trade receivables amounting to ' 11,819.18 Lakhs and ' 9,889.48 Lakhs as at March 31, 2024 and March 31, 2023 respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers located in India. Credit risk has always been managed by the Company through
The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company's capital management is to maximize the shareholder value and to ensure the Company's ability to continue as a going concern.
The Company has distributed dividend to its shareholders during this Financial Year. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of borrowings from various banks/ financial institutions. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made
(b) The Company had received notices of demand in respect of Order of Assessment of FY 2008-09, FY 2009-10, FY 2010-11, FY 2012-13, FY 2013-14, FY 2014-15, FY 2015-16, FY 2016-17 and FY 2017-18 towards VAT and CST liability treating hiring of cranes as transfer of right to use of cranes.
The Company had received a favorable order for FY 2008-09 from Maharashtra Sales Tax Tribunal against which the Sales tax department had preferred an appeal in the High Court. The Honourable Bombay High Court vide its order dated December 04, 2023 held that giving cranes on hire does not involve the transfer of the right to use the cranes, as the effective control and possession always remained with the Company. Hence, the Department's appeal stood dismissed.
Basis the above favourable judgement for one year from High Court and considering the nature of its business, the management is confident that ongoing litigations for other years will also be decided in the favour of the Company and hence no provision/disclosure of contingency is required.
(c) Income tax matters comprise demand from the tax authorities for the payment of additional tax of ' 18.27 Lakhs (2023: ' 2.61 Lakhs) upon completion of their tax reviews for the various financial years. The tax demands are mainly on account of TDS liability under the Income Tax Act and disallowances of certain expenses. The matter is pending before the Assessing Officer of Income Tax.
(d) The Company has received notice of demand in respect of FY 2017-18 and FY 2023-24 towards GST liabilities regarding disallowance of input tax credits, incorrect admissibility of input tax credit and generation of E-way bill with incorrect details. The matters are pending before various forums.
The Company is contesting the above demands of Sales tax and Income tax and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised.
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are as described below. A CSR committee has been formed by the Company as per the Act. The funds are utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
51 The remuneration payable to promoter director of the Company during the financial year ended March 31, 2024, exceeds the limits prescribed under regulation 17(6)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, by ' 517.70 Lakhs. The remuneration payable to promoter director in excess of the limits has been approved by the Board of Directors and the Company is in the process of placing the same before the shareholders for their approval by special resolution in the forthcoming Annual General Meeting.
52 The Company is under active discussions with an Independent Power Producer ("IPP") party for providing full-fledged turnkey services, right from conceptualisation to commissioning of wind turbine generators. The above discussion is basis the understanding that the Company would incorporate a special purpose vehicle which would carry out all the initial relevant activities, including application/approvals from various government authorities. On successful completion of such activities, the IPP party would acquire the shareholding of the SPV.
Accordingly, the Company has incorporated Sangreen Renewables Private Limited (SRPL) on March 23, 2024, to carry out the above activities. Post the year end, all relevant activities have been completed, and the Company is in the process of signing definitive share purchase agreement with the IPP party for transfer of ownership rights over SRPL.
Moreover, as there are no material transactions and balances in SRPL books to be consolidated, the management has decided not to prepare consolidated financial statements for the year ended March 31, 2024.
53 The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.
54 The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (and previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
55 The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
56 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
57 The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
58 The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in note 3.1 to the financial statements, are held in the name of the Company.
59 The Code on Social Security 2020
The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
60 The other requirements of the Schedule III of the Companies Act, 2013 not specifically disclosed are either Nil or not applicable to the Company.
61 No significant subsequent events have been observed which may require an adjustments to the financial statements.
62 Previous year figures have been regrouped/reclassified to confirm presentation as per Ind AS and as required by Schedule III of the Act.