The company has gone ahead and bought a piece of agricultural land to set up this facility. However, the said agricultural land is yet to be converted into non agriculture land and we found out that any such conversion involves paying a fee to the government.
The company has stated that the obligation to pay any such fee and convert the land falls squarely on the seller and yet, despite the uncertainty involved in the transaction, the company has furnished an advance of 46 lakhs while the whole plot is said to cost about 50 lakhs.
But all that shouldn’t matter so long as the company is posting good numbers. SO how are the company financials looking
Well, right now the financials look very unremarkable. In 2013, the company posted revenues of about 66 Crores and suddenly the next year the company’s revenues halved after cutting down their trading operations. Since then it has been slow growth. From 33 Crores (FY 14) to 44 crores (Jan FY18) over 4 years, the financials do not evoke a lot of confidence.
Profits too have largely remained stagnant and look rather unremarkable. So, despite having a board with incredible pedigree they haven’t translated the same kind of pedigree across to the income statement.
So for a good portion of the company’s existence, significant parts of the revenue came from Magicrete, a group company run by Mr. Bhimal’s sons. And that’s when we realise our introduction only tells you half the story.