Well could not resist to follow up after going through Annual report for FY15. Find enclosed my observations:
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No where company mentioned about realisation or volume. So the only way to use quasi indication is power consumption which has grown by 29% during FY15.
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Please go through segment wise numbers in Annual report. In addition to Jump in PBIT margin in Garment from 30% in FY14 to 36% in FY15, what is interesting to note is turn around in fabric business from -10% in FY14 to 4% in FY15. If we adjust intergroup transfer from fabric sales, nearly 97% of outside sale is to Kitex Childern Wear and Kitex Limited. Same was 84% for FY14. So what factor contribute such turnaround with no change in client is worth exploring.
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Refer to PAge 55 of Annual report in Secretarial audit report. The company continue to miss timeline on various regulatory filing with ROC
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Finished Good inventory at RS 0.81 Cr is less than 1 day of Cost of Sales. Cost of sales calculated as under for FY15
Cost of RM 209.78
Inventory change -0.21
Employee cost 74.5
Power 18.99
Cost of goods sold 303.06
Daily Cost of goods 0.83
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Page 74 Shows Balance in Bank in Current account at Rs 199.39 Cr as on March 31 2015. Why so large fund kept in current account? Even at 9% Fixed interest, average current account balance of Rs 150 Cr (31-3-2014 Balance 98.5 CR) , the company has lost Rs 13.5 Cr of interest.
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Page 77: Interest on other than borrowing Rs 1.19 Cr during FY15 as against 0.56 in FY14. On one hand we have great liquidity of more than 100 Cr in current account, on other hand we continue to pay interest on other than borrowing (Which is for what purpose?). Need further understanding.
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Please check contingent liablities specifically with reference to EPF delay. The company appears to face major problem in this area.
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Page 89 give impression that company internal auditor as same as statutory auditor.
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As per Chairman Letter, the company intend acquire/expand into backward integration. (Page 9 Annual report)
