Lets use this thread to record companies where questions have been raised on sudden changes in accounting policies (that boost profits or hide losses), where say auditors have qualified accounts, and other instances of Aggressive Accounting that have come to light.
Its important that we quote the source of the news and provide the available links. Also if the company has made any clarifications in this regard by way of announcement at stock exchanges, we should quote that. This is not to pass any judgement on the companies involved, but to make for better-informed decision making (sometimes valuations may look mysteriously alluring).
Must Dos, while Posting:
- Quote Source(s), and provide Links (use official links as mentioned below)
- Prefer official sources such as Stock Exchange Announcements, SEBI Orders over say Newspaper Reports
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Corp Filing | Corporate Filing and Dissemination system(maintained by BSE, NSE)
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Watchout Investors(maintained by Ministry of Corporate affairs under the Investor Protection Fund)
We can always discuss a particular case and its implications more if anyone wishes. Just make sure you use the “Reply to this” button. While posting for a new company always use the “Quick Reply” button.
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Prajay Engineers Syndicate
Auditors qualify Prajay Engineers Syndicate Accounts for 2007-2008
The auditor of Prajay Engineers Syndicate has qualified the accounts: “We have not been able to obtain corroborative audit evidence for revenue aggregating to Rs 14377.10 lakh and relatedconstruction, and development expenses of Rs 7526.54 lakh and debtors outstanding as on 31 March 2008 relating to Prajay Harbour City Project.”
As per the explanation given by Prajay Engineers Syndicate in its annual report, “a theft took place at the Visakhapatnam site office of the company. As a result, all the books of account, supporting vouchers, records, sale agreements and a computer where all the transactions / data were stored relating to Prajay Harbour City, Visakhapatnam, were found missing, though some of the records and documents were later retrieved. The accounts of the company for the year under review (ending March 2008) were, therefore, required to be reconstructed based on the information available with the management and certain assumptions and estimates were required to be made for this purpose.”
At the end, Prajay Engineers Syndicate booked revenue of Rs 143.77 crore, relevantconstructioncost of Rs 75.26 crore, and dues from debtors relating to Prajay Harbour City project based on the management estimates / assumptions included in the financial statements for the year ending March 2008 (FY 2008). The turnover, without corroborative audit evidence, constituted around 41% of its core business income.
