Hi-Green Carbon's audit record is clean on its face, unqualified opinions on both the standalone and consolidated FY2024-25 financials, but the supporting disclosures carry a consistent pattern: related-party money moving into a wholly owned subsidiary, bank filings that do not match the books, and a subsidiary structure where the parent earns nearly all the profit.
Key findings
- Large unsecured loans and a ₹30 crore guarantee flow into a subsidiary, while the parent borrows interest-free from its holding company
Major- Long-term unsecured loans to wholly owned subsidiary Shantol Recycling surged from ₹43.80 lakh in FY2024 to 12.44 crore in FY2025, representing 100% of total loans and advances. The company also provided a corporate guarantee for a ₹30 crore loan from Punjab National Bank to Shantol Recycling, and purchased plant, machinery and parts worth ₹27.09 crore from Radhe Renewable Energy, a company where Director Shaileshkumar V. Makadia is also a director. These loans are repayable on demand with no fixed term and no interest prescribed. - Bank-filed stock and receivable statements persistently diverge from the books, while borrowings and capital work-in-progress rose sharply in FY26
Major- Quarterly returns filed with the bank for working capital limits over ₹5 crore were not in agreement with the books, with inventory differences of ₹40.96 lakh (Jun 2024), ₹79.12 lakh (Sep 2024), ₹4.73 lakh (Dec 2024), and ₹4.67 lakh (Mar 2025) due to late accounting of purchase/sale bills. Trade receivable differences ranged from ₹0.08 lakh to ₹47.69 lakh across the same quarters. The FY2026 consolidated balance sheet showed long-term borrowings of 39.97 crore (FY2025: 31.26 crore) and capital work-in-progress of 52.11 crore (FY2025: 8.54 crore). - Clean audit opinions every year, but the same CARO exceptions recur without escalation
Major- J C Ranpura & Co issued unqualified opinions for FY2024-25, signed 27 May 2025, yet the auditor again reported that bank filings did not match the books, that the audit trail was not enabled at the database level for the entire year, and that cost records under section 148(1) were still in preparation. The auditor also reported loans granted without specified terms or repayment periods, and that loan and guarantee terms for the subsidiary were produced but not on stamp paper. - Subsidiaries carry heavy capital commitments but contribute minimal or negative returns
Major- The parent contributed 95.00% of consolidated profit in FY2024-25 (10.57 crore), while Shantol Recycling contributed -0.02% and Samsara Recycling 5.02%. Consolidated PAT for FY2025-26 was ₹3.43 crore versus standalone PAT of ₹8.35 crore, meaning 143% of standalone profit was offset at subsidiaries. Shantol Recycling had not commenced operations by year-end, and the 51% subsidiary Green Valley Hydrocarbon was sold on 9 Feb 2026 for ₹51,000 after posting nil turnover. - A ₹4.11 crore income tax demand from A.Y. 2013-14 has been under appeal for years, with a newer demand added
Minor- The ₹4.11 crore demand for A.Y. 2013-14 has been disclosed as a contingent liability under appeal before the Commissioner of Income Tax (Appeals), NFAC, Delhi in FY2022-23, FY2024-25, and FY2025-26. A further ₹66.15 lakh demand for A.Y. 2022-23 was added in FY2025-26. - Revenue recognition is routine, but no doubtful debt provision was made despite acknowledged possible bad debts
Minor- The revenue recognition policy states revenue is recognized when risks and rewards transfer, with no postponed recognition during FY2025-26. However, the consolidated financial statements for FY2024-25 state no provision was made for doubtful debts and that these "may include some bad debts, which have not been determined so far". Revenue grew from ₹77.95 crore in FY23 to ₹139 crore in FY26, while receivable days moved from 26.32 in FY23 to 40.60 in FY24 and 32.13 in FY25. - Promoter holding is stable and unpledged, but director attrition and a proficiency test gap mark the governance record
Minor- Promoter and promoter group shareholding stood at 71.92% with zero pledge as of the latest fiscal year. Independent Director Mr. Narendra Kantilal Patel had not passed the Independent Director Proficiency Test as of 31.03.2026, with the deadline extended to 06 August 2027, and Whole-Time Director Nirmalkumar Karshandas Sutaria resigned effective 27 November 2025.
What to watch
- Income tax appeal, A.Y. 2013-14. Outcome of the ₹4.11 crore demand before the Commissioner of Income Tax (Appeals), NFAC, Delhi, pending as of the FY2025-26 annual report.
- Income tax appeal, A.Y. 2022-23. Outcome of the ₹66.15 lakh demand before the Commissioner of Income Tax (Appeals), NFAC, Delhi, pending as of the FY2025-26 annual report.
- Subsidiary loan repayment. Repayment or renewal of the ₹21.88 crore unsecured loans to Shantol Recycling, repayable on demand, as disclosed in the FY2025-26 annual report.
- Subsidiary guarantee. Status of the ₹30 crore corporate guarantee to Punjab National Bank for Shantol Recycling's term loan and cash credit, as disclosed in the FY2025-26 annual report.
- Shantol's first full year. The 100 TPD pyrolysis plant commenced operations in May 2026; monitor its first full-year contribution in FY2026-27.
- Director proficiency deadline. Mr. Narendra Kantilal Patel must pass the Independent Director Proficiency Test by 06 August 2027.
Bottom line: This is an audited record with unqualified opinions and stable, unpledged promoter holding. The risk sits in the related-party structure: money flows into a wholly owned subsidiary that has yet to earn meaningful profit, backed by a bank guarantee, while bank filings do not fully reconcile with the books. Watch the loan repayment and the guarantee status, and read the subsidiary contribution line when Shantol's first full year lands.