Provisions and Contingent Liabilities:
Provision are recognized (for liabilities that can be measured by using a substantial degree of estimation) when;
a) the company has a present obligation as a result of a past event;
b) it is probable that outflow of resources embodying economic benefits is expected to settle the obligation; and
c) the amount of the obligation can be reliably estimated
Contingent liability are disclosed in the notes in case there is:
i) Possible obligation that arises from past events and 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 enterprise; or
ii) a reliable estimate of the amount of the obligation cannot be made.
a present obligation arising from past events but is not recognized
i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
ii) a reliable estimate of the amount of the obligation cannot be made.
c) Terms/right attached to equity Shars
The company presently has only one class of equity shares having par value of Rs.10/- per share. Each holder of equity share is entitled to one vote per share. The equity shareholders are entitled for dividend as and when approved in the annual general meeting of the company.
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.
Detail of Shares held by holding company or its ultimate holding company including subsidiaries or associates of the holding
d) company or ultimate holding company of the company.
There is no holding or ultimate holding company of the Company.
e) Aggregate number and class of shares allotted as fully paid up by wayof bonus shares
The above borrowings are due for repayment for less than 12 months from the reporting date. Further the Company does not have any unconditional right to defer settlement of liability of atleast twelve months from the reporting date.
Note: Details of Security
For Working Capital Borrowings
1 As per HDFC Bank Sanction Letter dated 06.02.2024, an Amount of Rs. 1441.69 Lakhs was sanctioned to Pentagon Rubber Limited. Out of the said amount, Rs. 750 Lakhs was sanctioned against Cash Credit Facility for working capital needs of the company, Amount of Rs. 37 Lakhs was sanctioned against GECL and Balance amount of Rs. 654.69 Lakhs was against Bank Guarantees, Corporate Cards and Letter of Credits.
Primary Security:
CC limit and GECL are secured by way of hypothecation of Stocks of Raw materials, Stock in process, Finished Goods, Stores and spares Book Debts, FDR against Bank Guarantee.
Collateral Security
Equitable Mortgage of Industrial Property of the Company situated at Village Behtra, Handsera road, Village Behra, Dera Bassi, Dist.
Mohali, Punjab-140507 and Personal guarantee of the Directors of the company.
2 Sanctioned OD Limit for Rs. 300 Lakhs from Axis Bank is secured by way of equitable mortagage of Residential Property located at House No. 515P, Sector-6, Panchkula in the name of Sh. Subhash JainF/o of Sh. Ashish Jain (Managing Director). It is secured by way of Personal Guarantee of all the Directors of the Company and Sh. Subhash Jain.
3 An Amount of Rs. 110.00 Lakhs was sanctioned from National Small Industries Corporation Limited for raw material assistance and secured by way of hypothecation of Bank Guarantee ofRs. 1.10 Crores.
For Term Loans
4 Term Loan against Machinery was sanctioned by SIDBI on 13.12.2023 forRs. 810 Lakhs. Out ofRs. 810 Lakhs, Amount of Rs. 758.78 Lakhs has been disbursed by SIDBI till 31.03.2024. Loan is Repayable in 54 installments ofRs 1500000 per month @ 7.8% pa. starting from 10.09.2024.
31 SEGMENT INFORMATION:
The company is primarily engaged in manufacturing & exporting of Conveyor & Transmission Rubber Belting. Segment Reporting is not applicable on the company as it has no multiple Business or Geographical Segments.
33 In accordance with the Accounting Standard (AS)-28 on “Impairment of Assets” the Company has assessed as on the Balance Sheet date whether there are any indications (listed in paragraphs 8 to 10 of the standard) with regards to Impairment of any assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.
34 Title deeds of all immovable Property are held in name of the Company and No revaluation of Property, Plant & Equipment and Intangible assets has been carried out during the year.
35 Disclousure as per section 135 of Companies Act, 2013 on Expenditure on Corporate Social Responsibility is not applicable to the Company.
37 Balance of Debtor Maharashtra State Power was receivable for Rs.19.54 Lakhs. Considering various prevalent factors, it was decided by the management of the company that the same was doubtful to be recovered and the same is being written off over 5 years from FY 2022-23 and onwards. For FY 2022-23 and FY 2023-24, amount of Rs. 7.81 Lakhs has written and remaining amount will be written off in next three years.
Along with this, two other debtors namely, India Tyre & Rubber Co (India) Ltd are receivable for Rs. 57.68 Lakhs and Indian Oil Corporation Ltd (Haryana) are receivable for Rs. 0.33 Lakhs. Both debtors are considered doubful to be recovered by managemnent. Provision of Rs. 2.09 is being created in FY 2023-24 against doubtful debtors.
38 IPO Expenses are being booked as expense over 5 years from FY 2023-24 and onwards as IPO was came in July 2023.
B) Defined Benefit Plans Gratuity scheme
The amount of gratuity has been computed based on respective employee’s salary and the years of employment with the Company. Gratuity has been accrued based on actuarial valuation as at balance sheet date, carried out by an independent actuary.
C) Compensated Absences
Compensated absences include earned leaves. Company has the policy of adjusting earned leaves with holidays taken by employees. If earned leaves remains after adjusting holidays then the same is paid to employees at year end itself. At year end, all earned leaves were adjusted with holidays taken by employees and no payable was there as leave encashment.
The following tables set out the disclosures in respect of the post-employment benefits and long term employee benefit recognized in Statement of Profit and loss and Balance Sheet in accordance with Accounting Standard (AS) 15 are as under:
43 The company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
There are no amounts that are due to be transferred to the Investor Protection Fund in accordance with relevant provisions of the Companies Act 2013 and rules made thereunder.
The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post- employment benefits has been notified in the Official Gazette on 29th September 2020. The draft rules have been released on November 13, 2020 and suggestions have been invited from stakeholders which are 45 under consideration by the Ministry. The impact of the change will be assessed and accounted in the period in which said rules are notified for implementation.
The company does not have any Benami property, where any proceeding have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988).
47 The company has not been declared as wilful defaulter by any bank or financial Institution or other lender.
The company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
The company does not have any such transactions which is not recorded in the books of accounts that has been surrendered or disclosed as income during the
49 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).
The company has not advanced or loaned or invested funds (either from borrowed funds or share premium or any other sources or kind of funds) by the
50 company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding (whether recorded in writing or otherwise) that the Intermediary shall.
a) directly or indirectly lend or invest in other person 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.
The company has not received any fund from any person or entity,including foreign entities ( Funding parties ) with the understanding (whether recorded in 3 writing or otherwise) that the company shall.
a) directly or indirectly lend or invest in other person 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.
52 The company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
Loans to Director: There are no loans or advances in the nature of loans are granted to Promoters, Directors, KMPs and their related parties (as defined under ^ Companies Act, 2013), either severally or jointly with any other person.
The Company has borrowed from banks or financial institutions on the basis of security of current assets and filed monthly returns or statements of current 54 assets with banks which are in agreement with the books of account except the following mentioned below:
Reconciliation of Books of Accounts with Form 26AS and Annual Information Summary (AIS) and Total Information Summary (TIS) is done till date of signing
55 of financial statements as complete information will be reflected after filing of TDS returns by deductors. Effect of the same will be taken in Income Tax Returns later on.
56 The company does not have any charge or satisfaction which is yet to be registered with Registrar of companies beyond the statutory period .
Compliance with number of layers prescribed under clause (87) of Section 2 of the Act read with Companies (restriction on number of layers) Rules, 2017 is not ^ applicable as there is no subsidiary.
58 The Company has used the borrowings from banks for the specific purpose for which it was taken at the balance sheet date.
59 The figures of comparative period have been regrouped / reclassified to make them comparable with current year figures, if any.
6Q Balances of Debtors and Creditors are subject to confirmation.
61 Figures in brackets indicate deductions.
As per our report of even date attached
For S. Jain & Co. For & on behalf of the Board of Directors
Chartered Accountants For Pentagon Rubber Ltd.
Sd/- Sd/- Sd/-
(Sanjeev Jain) (Ashish Jain) (Saurabh Jain)
Partner Managing Director Whole Time Director
M.No.088469 DIN:00738412 DIN:00761460
Sd/- Sd/-
Place: Derabassi
Date: 21.05.2024 Chief Financial Officer Company Secretary
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