- Typical 'lala' company with sole propritary auditor albeit quite well paid at 18lakhs, underpaid professional KMP(CFO at 35lakhs and CS at 7 lakhs; cost auditor at 0.5lakh).
- Spent just 10% of CSR budget(!)-prudent financial management :D
- Brand focus with commensurate R&D investments
- Exports are largely to middle east
- However, the company substantiates its leadership posiiton claim with data from AC Nielen on overall, traditional and modern trade market shares.
Some accounting red flags via unexplained expenses growth in key items not commensurate with sales/explained factors
Amounts in Lakhs
|Note||Pg||Item||FY 2016||FY 2015||Variance||Comment|
|29||149||Internal Auditor's Fees||32.5||20.22||61%||E&Y appointed from 1 Oct 2015, at probably double the remuneration of earlier auditor(Pg41)|
|29||149||Land, Warehouse & Godown Rent||948.75||278.72||240%||Topline growth only 7%, so this is unusual|
|29||149||Insurance Charges||144.92||77.95||86%||Topline growth only 7%, so this is unusual|
|29||149||Testing & Inspection Charges||107.4||28.02||283%||Export Sales growth only 40%(overall 7%) so this is unusual|
|30.02||150||Auditor Remuneration(Taxation matters)||10.77||1.69||537%||Unexplained auditors payments-red flag|
In totality, since the CAGR in revenues, EBIT, PBT are in line, and there has been debt reduction, the company does not seem a risk. However, above is an example of analysis which one could do to identify accounting risk.
Those interested in the annual report can download from below: