3.2 The term loan from Edelweiss Retail Finance Ltd. originally obtained by the firm M/s. Polychem Exports (whose business has been takenover by the company as a running business together with all its assets and liabilities, vide business takeover agreement dated 23-03-2022), is secured against the mortgage of Shop No. 201 to 216, Laxmiba Complex, Cinema Road, Bardoli, belonging to the directors of the company and their relatives, which is repayble in 145 months carrying floating rate of interest @ 14.25% p.a.
The Term Loan from Edelweiss Retail Finance Limited (ERFL) originally sanctioned to the firm M/s. Polychem Exports (whose business has been takenover by the company as a running business together with all its assets and liabilities, vide business takeover agreement dated 23-03-2022), under the Emergency Credit Line Guarantee Scheme (ECLGS) of the National Credit Guarantee Trustee Company Ltd. (NCGTCL) to mitigate the economic distress faced due to Covid-19 is secured against the collateral of the second charge on all the existing primary and collaterol securities including mortgages created in favour of the ERFL. The said facility is also secured with guarantee extended/to be extended by NCGTCL under ECLGS scheme. The said term loan is repayble in 48 months (including 12 months moratorium for principal repayment), which carries floating rate of interest of 14% p.a.
The Vehicle Loans from HDFC Bank Ltd. is secured against the hypothecation of the Vehilce, which carries interest @ 8.15% & 8.90% p.a. and is repayable in 60 / 40 equal installments, respectively.
The Vehicle Loans as availed from Kotak Mahindra Bank Ltd. are secured against the hypothecation of the respective Vehilces, which carries interest @ 11.12% & 11.13% p.a. and is repayable in 24 equal installments.
3.3 The closing balances of unsecured loans are subject to confirmation, however, the Directors have certified the respective balances. Interest @ 9% tc 11% p.a. (Previous Year: 9% to 10.50% p.a.) have been paid on the unsecured loans.
4.1 Deferred Tax Liability/Asset is recognised as per AS-22 (Accounting for Taxes on Income) arising out of temporary timing differences. As per AS-22 "Accounting for Taxes and Income" issued by ICAI, company has works out deferred tax assets in the current year of Rs. 3.18 Lacs (Previous Year : Deferred Tax Assets of Rs. 0.48 Lacs) on account of timing difference attributable to the claim of depreciation which has not been recognised in the books of accounts of the current year, whereas, in the preceding year deferred tax assets has been recognised to the extent to the balance of deferred tax liabilities and set off in the books of accounts.
6.1 During the current year, the company has availed cash credit facilities from the State Bank of India, whcih carries interest at 1.50% above EBLR, which is presently 9.15% p.a. i.e. present effective rate is 10.65% p.a., calculated on daily products at monthly rests. The said cash credit facility is secured against the hypothecation charge on stock and receivables and other current assets in the name of the company both current and future. The said cash credit facilities is also secured by way of equitable mortgage over the NA leasehold property at Shed No. CIB/307/2, Pandesara Industrial Estate, RS No. 80/P & 84/P of Village Pandesara, Surat along with construction thereon belonging to M/s. Shreenathji Industries, NA leasehold property at Shed No. CIB/308/1, Pandesara Industrial Estate, RS No. 84/P of Village Pandesara, Surat belonging to M/s. Aditya Chemicals Prop. Sonal Bharat Bhatia and NA leasehold property at Shed No. CIB/308/2, Pandesara Industrial Estate, RS No. 84/P of Village Pandesara, Surat belonging to M/s. Bharat Chemicals Prop. Bharat Bhatia. The said cash credit facilities is further secured by way of corporate guarantee of M/s. Shreenathji Industries, M/s. Bharat Chemicals and M/s. Aditya Chemicals as also the personal gurantee of all the directors of the company and Shri Rajeshkumar L. Bhatia and Mrs. Sonal Bhatia the relatives of the directors.
6.2 At at the current yearend, the company has not utilised the said cash credit facility with the State Bank of India and accordingly, the balance to the credit of the company lying with the said bank as at the current yearend of Rs. 1431.50 Lacs stands reflected in the Notes 14 : 'Cash and Cash Equivalents' in the Balance Sheet.
7.2 The trade payable to MSME is inclusive of amounts payable to Medium Enterprises under the MSMED Act of Rs. 245.06 Lacs in Current Year (Previous Year Rs. 82.55 Lacs).
7.3 The disputed dues - MSME represents the amounts payable for Plant & Machinery which is not paid as the qualuty standard of machine does not match as agrred by the supplier.
7.4 The above information has been provided as available with the company to the extent such parties could be identified on the basis of the information available with the company regarding the status of suppliers under the MSMED Act.
7.5 Trade Payables are non interest bearing and are normally settled within the terms. There are no other amounts paid/payable towards interest/principal under the MSMED Act.
7.6 The compnay was incorporated on 10-12-2021 and accordingly, the detail of trade payables for above 3 years is not applicable to the company since three years have not elapsed as on the Balance Sheet date.
13.2 Debts dues by Related Parties
- By Directors & Other Officers of the Company *
- By Firms or Private companies in which the directors are partner or director or member
* In the current year, the amount of debts due from related parties is inclusive of debts of Rs. 1545.15 lacs receivable from M/s. Bhatia Colour Co. Prop. Bharat Bhatia (Director) since the amount receivable by the company from M/s. Mahalaxmi Chemicals has been taken over by him against the debt payable by him to the said concern.
In the preceding year, the amount of debts due by related parties, are not pertaining to the business of the company, but it relates to the business of M/s. Ravi Chem and M/s. Polychem Exports whose running business had been takenover by the company along with all its assets and liabilities vide business takeover agreements in the F.Y. 2021-22.
13.3 In the current year, the company has entered into an agreement dated 28-03-2024 with Dacoc Chemicals Pvt. Ltd. for recovery of its old debtors aggregating to Rs. 26.25 Cr. which was receivable by the company from various parties of M/s. Ravi Chem and M/s. Polychem Exports, whose running business had been taken over by the company in the F.Y. 2021-22 and thus, the said amount is now receivable by the company from Dacoc Chemicals Pvt. Ltd. who in turn will recover the same from various parties by charging some commission
13.4 The trade receivables are net off the amount of advances received from customers of Rs. 43,94,170/- in current year (Previous Year Rs. : 6,22,547/-).
14.1 At the end of the current year, the cash credit facility availed from State Bank of India has not been utilised by the company and accordingly, the balance of the company of Rs. 1431.50 lacs lying in the said bank account as at the year-end is grouped under the Notes of 'Cash and Cash Equivalents' in the Balance Sheet, instead of showing it in the Notes of 'Short Term Borrowings'.
10.1 Depreciation on Property, Plant and Euuipments is calculated on Written Down Value Method. The depreciation for the respective assets has been computed on the basis of their useful life as specified in Schedule II to the Companies Act, 2013, in accordance with the information and explantions as provided to us by the management of the company.
10.2 Property, Plant and Equipments are stated at cost of acquisition less depreciation.
10.3 The carrying amounts of the company's assets are reviewed at each Balance Sheet date. If any indication of impairment exists, an impairment loss is recognized to the extent of the excess of the carrying amount over the estimated recoverable amount.
12 Taxation
Tax comprises of Current tax and Deferred tax. Current tax in the books is recognised by opting the provisions of section 115BAA as introduced vide Taxation Laws (Amendment) Ordinance of 2019 to the Income Tax Act, 1961. As per AS-22 "Accounting for Taxes and Income" issued by ICAI, company has works out deferred tax assets in the current year of Rs. 3.18 Lacs (Previous Year : Deferred Tax Assets of Rs. 0.48 Lacs) on account of timing difference attributable to the claim of depreciation which has not been recognised in the books of accounts of the current year, whereas, in the preceding year deferred tax assets has been recognised to the extent to the balance of deferred tax liabilities and set off in the books of accounts.
13 Impairment of Assets
The carrying amounts of the company's assets are reviewed at each balance sheet date. If any indication of impairment exists, an impairment loss is recognized to the extent of the excess of the carrying amount over the estimated recoverable amount.
14 Provisions. Contingent Liabilities and Contingent Assets
The Company claims to have no Contingent liability and hence, it is not provided for in the books of accounts. Contingent assets are only discolsed when it is probable that the economic benefits will flow to the assessee.
15 Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.
17 Additional Regulatory Information:
(i) The company does not have any immovable property whose title deeds are not in the name of the company.
(ii) The Company has not revalued any of its Property, Plant and Equipments.
(iii) Company has not given any Loans or Advances in the nature of loans to its promoters, directors, key managerial personnel and related partie
(iv) CWIP Ageing Schedule
In absence of any Capital Work In Progress such details are not applicable.
(v) There is no intangible asset under development as at the year-end.
(vi) No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) (as amended in 2016) and the rules made thereunder.
(vii) The quarterly statements of current assets filed by the Company with Bank for its borrowings are in agreement with the books of accounts and there are no material discrepancies therein.
(viii) The Company is not declared wilful defaulter by any bank or financial institution or other lender.
(ix) The Company does not have any transactions with companies struck off u/s. 248 of the Companies Act, 2013 or u/s. 560 of the Companies Act, 1956.
(x) No charges or satisfaction is pending to be registered with Registrar of Companies beyond the statutory period.
(xi) The company does not have any subsidiary and hence, there is no violation with regard to the number of layers prescribed u/s. 2(87) of the Act r.w. Companies (Restriction on number of Layers) Rules, 2017.
(m) Reasons for significant variation in ratios
The reasons for variation in excess of 25% in various ratios are explained as follows
(i) Current Ratio
The current ratio has increased substantially, since in the current year, the company has cleared major payments of Trade Payables which has reduced to Rs. 18.17 Crores in the current year as agsinst Rs. 32.63 Crores in the preceding year, coupled with the fact that even the trade receivables has also reduced to Rs. 68.01 Crores in the current year as agsinst Rs. 93.17 Crores in the preceding year,.
(ii) Debt Service Coverage Ratio
The debt service coverage ratio has increased substantially, since in the preceding year the debt service viz. repayment of short term and long term borrowings and the interest expenses thereof, were substantial in the previous year.
(iii) Interest Service Coverage Ratio
The interest service coverage ratio has increased substantially, since in the preceding year on acount of substantial repayment of short term and long term borrowings, the interest expenses has reduced substantially in the curret year whereas, there is no material changes in the EBIT.
(iv) Inventory Turnover ratio
The Inventory turnover ratio has increased, since the average inventory in the current year has reduced, as compared to preceding year since in the peceding year the average inventory level was high on account of two business takenover by the company including their inventories, in F.Y. 2021-22.
(v) Trade Payables Turnover Ratio
The Trade Payable turnover ratio has increased, since the average trade payables in the current year has reduced, as compared to preceding year since in the peceding year the average trade payables were high on account of two business takenover by the company including their trade payables, in F.Y. 2021-22.
18 No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.
19 Utilisation of Borrowed funds, share premium or any other source or kind of fund:
(A) Company has not advanced or loaned or invested any funds to any person(s) or entity(ies) including foreign entities (Intermediaries) with the understanding that the Intermediary shall -
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoevr by or on behalf of the company (Ultimate beneficieries) or
(ii) provide any guarantee, security or the like to or on behalf of the Untimate Beneficiaries.
(B) Company has not received any funds from any person(s) or entity(ies) including foreign entities (Funding Party) with the understanding that the company shall -
(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoevr by or on behalf of the Funding Party (Ultimate beneficieries) or
(ii) provide any guarantee, security or the like to or on behalf of the Untimate Beneficiaries.
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