This are the queries which i had written to mgmt before IPO and got responses, did not invest because did not find it satisfactory.
Second set of queries for which I got no revert:-
- Short Term loans to the tune of approx 5 crores are granted to
related parties and we are raising approx 10 crores through equity
route. If you could help understand the logic of granting loans to known
parties, when we our selves our raising further money. If you could
help at what rates of interest the loans have been granted and has
interest recieved by the company. Received and not accrued.
Were this loans sanctioned by Board of Directors,comprising of Independent Directors as well.
- As far as car goes, out of 1 crore car loans, 73.50 lacs pertain
to one single car loan. Understanding the size of the business, and also
looking at the list of directors, would appreciate if you could help,
which working director is using the car.
First set of queries and responses:-
-
Company has bought few land parcels in the state of Madhya Pradesh for
the purpose of building hostels. Would like to know the following
details regarding hostel
Also it is stated that the above hostel is created in continuation
of our basic object of providing support services to educational
institutes, we intend to construct a Hostel building for own operations
as well as to undertake administration of college, hostel and related
facilities of educational institutes. When we have our registered office
and Corporate office in Maharashtra. The logic of investing in MP.
The Company intends to start short term residential programs on
business management. As per survey and research such type of course has
huge potential in Central India. These are premium courses for Upper
class, and middle upper class students. But such type of course requires
state of art infrastructure facilities.
The site is on the border of Madhya Pradesh and it’s not more than 45
minutes run from our corporate office. Though the state changes, but
the distance is manageable. Importantly adjacent to our site one more
big education campus is also coming which creates a big opportunity for
our model.
Further such type of courses have huge potential from cities like
Raipur, Nagpur and other cities of central India for which we found this
location as central.
There is very little scope of under utilization of resources because
there are colleges under our management to whom we can provide hostel
facilities till the time our course is in full swing.
- The development is presently in very early stage and in the first phase it will need around an investment of 5 Cr.
- Further as per the prospectus Cash Flows are negative till Sep 2016,
to the tune of 4.07 crores from operating activities. It is explained
that Income is booked on accrual basis, but cash received at the end of
the year. Would like to know what kind of credit we give to our clients
and also the contract model basis on which we enter with clients e.g.
services to be provided in advance and money recd at the end of year or
anything else. If you could explain little about Cash flows.
mid-year payable and receivables are high as compared to our year end
position because, as per the policy of the Company the accounts are
reconciled at the year end and to the extent possible we try to settle
the balances annually. This policy helps us to avoid any long
outstanding and the possibility of bad debts. In the half yearly balance
sheet the parties are having a running balance hence the debtors
reflected are high as compared to the year - end position.
our training model for college students, we contract with the colleges
for taking up regular classes on the soft-skill, personality development
and employability skill training. The colleges allot us weekly sessions
in their schedule. The model is developed semester wise. The billing
for these trainings is done on half yearly basis. As on 30th September
the bills for semester wise trainings were raised for which the amount
will be received in a period of around 2 to 3 months.
most of the services we have monthly billing. We don’t have long
outstanding balances and till date there had been no written off on
account of bad debts.
- Further it seems that our basic objective revolves around education,
but we had invested in Solar Panels and then sold and also had income to
the tune of 7 lacs from this source. Any specific reason for investing
in Solar Panels which is in complete contrast to our line of business.
Also is the company presently also invested in solar panels and what us the future course for this business.
power helps to save a lot in the electricity bills (on an average 40%
to 50%) improvements were observed. So initially we thought of providing
the services to colleges so that they can have major savings in
electricity and the same can be invested in other quality area. But yes
as rightly pointed it’s not our core activity. The management soon
realized that the time and resources can be utilized in other unexplored
core areas we immediately sold off the plant in F.Y 2016-17. So
presently we are not having the solar power segment.
- Also company is planning to come out with issue of approx 10 crores,
but presently there are about 6 car loans outstanding to the tune of
Rs.1.29 crores. This is about more than 10% of the issue size of the
money. If you could throw some light about all this cars been used by
whom and other details.
have vehicle for our directors, head of various department. Further our
training and marketing segment requires travelling and since we have
clients at various locations we invested into vehicles for fast and
efficient working.
-
Also if you could help us with finances till 31.12.2016 as we have
already crossed this and also future guidance as regards revenue and
profitability. Further it is mentioned that the issue money is going to
be used for Working Capital purposes. So also if you could help
elaborate a little on this.
It will be difficult to share the finances of 31st Dec 2016, as of now.
Ours
is a service industry so lot of investment is required in the man-power
which is a regular monthly expenditure. Till date we have a record of
making the payment of salary on 1st of every month.
Presently
we are in the process of developing and exploring the E- platform for
our training module and for this will need some investment in the
initial phase to develop good quality content and course module. We
intend to move on subscription model for verticals like providing
infrastructure facility, Sale of stationary, library books and
periodicals etc which can easily be automate with the use of
technology. It will not only bring the transparency in work but will
also support our vision of expanding geographically.
Such
development needs investment in human resource. Hence in order to meet
our working capital requirement we are coming up with an IPO.
- Short Term Loans has increased from 1.19 crores to 4.39 crores till 30.09.16. If you could help us understand this.
During
the month of July and September we have stationary kit sale resulting
into inflow of funds and further in the mid of the year we even sold our
solar plant further increasing our cash flows. We wanted to invest the
idle funds for short term hence the same were given as Loans to known
parties.
-
Also the brief background of promoters of the company i.e. Mr.Risabh
Surana and and Mighty Overseas Ltd. Are they related to education sector
or are strategic investors and company is run by professional managers
appointed.
The
company is owned by Mighty Overseas Pvt Ltd. The directors in this
company are Leena Tatiya, Surendra Kamble & Ajay Chaudhary. Mr
Rishabh Sunil Surana is also as a promoter of GEL.
Yes, they are strategic investors and company is run by professional managers appointed.
Thanks
a lot for showing interest in our company, your to the point queries
are appreciable. We hope that you got a satisfactory reply for your
queries. In case you need any further clarifications please feel free to
contact.
It will be our pleasure to have you as our partner in growth. Looking forward for a long term relationship.
