Hi, while this might not pertain to this thread, let me confirm since this has been asked here:
- Management of listed companies will not mislead investors because anyone can pick up data from MCA. So there should never be a difference between data on MCA and the balance sheet. It can only be due to delay in updating MCA by one of the banks or a mistake in checking the data. In case a bank finds a mismatch, it is due to procedural issues and the company/other banks rectify it.
- If a company has taken X loan from Bank1, there is a particular charge created against X loan from Bank1. That particular loan charge is individually closed when a company pays off the loan. This is why you will see multiple rows for the same bank sometimes. Eg: HSBC has a loan closed on 04-04-2019 while a new/separate loan was started on 14-02-2019. MCA website does not get updated with the total. You have to add that manually.
- The only case for mismatch will happen if a loan has been taken from a bank after the date of publishing of balance sheet. Eg: If a company takes a fresh loan after March2020, this will only reflect in their next balance sheet, but the bank will update on MCA as soon as possible. This process is called ‘charge creation’. Banks create a charge on the asset of the company given as security - Current assets, fixed assets, future assets, propery given as collateral etc. So if a new bank is sanctioning a loan after March2020 they will cross check from MCA and not go only by the balance sheet. In case of laurus, there is no new loan charge created since Feb2019 on MCA, but SBI loan has been modified on Mar-2020. This modification can be an enhancement in loan amount also, which maybe explains the small rise in debt from FY19 to FY20.
- For additional clarity: if 2-3 banks give loans to the company against the same securities(CA, MFA, properties), they give a Pari passu letter to each other so that they legally have the same security even through the property papers might be with one bank. This is called a multiple banking arrangement. In case of a consortium arrangement, all banks and company have a joint meeting to decide things, and there is a “Lead Bank” which takes care of most of the formalities on behalf of all banks and the banks dont have to carry out separate documentation, charge creation on MCA etc.
Easist way to figure out is to go to the company’s website and download the balance sheet : https://www.lauruslabs.com/Investors/PDF/Disclosures/Laurus-Labs-AR-2019-20.pdf
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- Long term borrowings are usually for Capex
- Current maturities are payment of long term loans due to be paid in current year
- short term borrowing is for working capital.
- The total shows INR 1056.8 Cr. for FY20
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So the balance sheet always gives the correct breakups. I was not able to find the breakup for short term loans, as due to lack of time was not able to go through all 100+ pages patiently. There is a need to go through MCA website only if you want to check if a fresh loan/modification has been done since the latest balance sheet. Re-iterating, no management/auditor of a listed firm will give false figures in a balance sheet about debt amounts. There can always be the rarest of exceptions.
Edit : Please also note, MCA shows sanctioned limits while the company might use only a part of those limits, also leading to a mismatch between MCA and Balance Sheet. Eg : If a bank has sanctioned 100 Cr to a company and their limit utilisation is only 50 Cr, then the March balance sheet will show only 50 Cr as Debt.