Tricks Indian companies play to fool investors now-I

This time of the year is earnings season in India when companies declare their full year results for the financial year Apr11-Mar12(most companies follow this year end due to the tax laws mandating this year for assessment purpose, but many others follow different year ends like June, July, Dec and so on). While reading several earnings releases, I observed some interesting things which I share in this post

1. Delaying the release of results:-While most companies do not publicly disclose their financial reporting calendar, if a company has delayed reporting its earnings significantly as compared to previous years, that is a clue of financial distress. The company may be cooking its books or trying to get financial support to avoid being singled out for 'going concern risk'. Recently, this was done by the R-ADAG group companies, GTL group and others.
   
2. Extending the financial year:-Companies do this to buy time or just to avoid reporting poor results(hence add a quarter or two to make the 'year' better'. Or else, for the same reasons as explained above(i.e 'going concern risk'). I suspect that Bartronics has sought an extension for the same reason.
3. Limiting auditor's scope:-In case of Shree Renuka Sugars, Bartronics etc, the auditors audit less than 20% of the revenue/assets/cash flow, leaving the rest to other auditors. While accounting and auditing norms permit this and have standards on the auditor's duty in this behalf, the fact remains that audit risk goes way up in this case as auditors may miss out on channel stuffing and other unusual transactions.
4. Releasing interim 'unaudited results' rather than audited/reviewed results:-While Indian listing regulations permit a maximum 10% deviation in significant items(revenue/earnings etc) of the actual audited numbers from the 'interim numbers', that leaves significant scope for companies to tinker around with accounting estimates, especially for those hovering on the verge of losses. While I''m yet to prove any such case, I'm on the look-out for it this season.
5. Changing presentation to hide details of unusual items:-for instance, Bartronics(again!) had an 'other income' exceeding its operating profit but did not explain that details anywhere in its earnings release/presentation. and why would it, it is better off for investors to assume it is operating profit without delving too much into the details.

Stay on the lookout for tricks in disclosure/presentation. More on this later.