ValuePickr Forum

Forensics and the art of triangulation

Its a good article, but I thought LIFO accounting is no longer allowed. Earlier I think cos that followed LIFO also had to create a LIFO reserve but that practice has been disbanded. Correct me if I am wrong as no expert. Inventory accounting has been used to inflate earnings effectively by many cos. Even fifo can be used to do that in a situation where raw material prices are increasing rapidly I.e reverse of the situation presented in article. More recently OMCs had to suffer major inventory losses due to fall in oil prices which they wrote off.

In the dollar industries thread , operating profits had gone up due to this reason. Not that its illegal or anything however its a good point to keep in mind while investing in cos where inventory forms a major part of assets.


Can this be considered a red flag? I found it a way to smooth out the revenue growth.

Need opinions.



See slides 25-31 / #CGPower


investor should sue the auditor …:zipper_mouth_face:
who the auditor is ??:face_with_monocle:

Go ahead and sue, pending cases 3.5 crore. You might get a judgement after 25 years.



The following excerpt from the book Bull bear and other beasts by Santosh Nair is very good in the subject cited



How a web of shell companies helped Bhushan Steel promoters siphon off funds

Benford’s Law
it is used for fraud detection in banks a good article below help you to understand



Independent director’s update on outcome of board meeting:

Promoter’s response to the outcome of the board meeting:


Not an expert in accounting. Was going through a Company AR “One Point One Solution” and noted few points which i felt uncomfortable with. Thought to highlight the same.

Companies holding more than 5% share holdings are disclosed. Yes Bank and Pantomath Stock Brokers Pvt Ltd holds around 14%. In fact Pantomath increased their holdings from 1.7% to 9.3% in 1 year.
Looking at the CSR of the company , the company has paid entire CSR to Pantomath Group company. Is it a possibility that part of same CSR funds is again invested in the company by Pantomath through other group company. 11

Similarly company has huge loan exposure in past year from Yes Bank which again holds a high stake in the company. It seems it is the only banker of the company.

1%20p%201 !!

Company has given Loans and Advances to some entity which are not disclosed. The amount of deposit looks high.

Coming to the finance cost , it is shown as a Net off with interest income. Unable to get the details from where they are receiving this interest income as all of the cash is in Current account.


They have computer systems of worth around 35 Cr. Is not that too high for a 40 Cr M-Cap Company.

Also how should one see company not paying the PF , ESIC and Labour Welfare Funds.

Company has 1171 permanent employees and has paid 55 Cr as Salary amounting to 4.7 Lac per employee on average. Read a lot of reviews on employment portals for One Point One Solutions , got a feedback of average salary paid around 1.8 Lac for BPO job. There are around 317 employees on Linkedin that looks fair.

@Yogesh_s You seems to have studied the company in more detail. Do you still track it.


Pantomath Investor Awareness & CSR Foundation has also collected 35,44,000 from Innovators Facade Systems Ltd,under CSR. No idea about other SME issues where Pantomath was Lead Manager.


Excellent Talk by John Hempton

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VERITAS REPORT ON INDIABULLS india bulls - bilking india.pdf (2.7 MB)


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NHAI held its maiden investors meet to assuage investors’ confidence. HDFC report on same would appreciate your view on this . @diffsoft

Thank you for sharing the note of HDFC Sec Inst. Research. I went through it, and with NHAI FY 18 Annual Report (FY 19 not yet available).

What I gathered from the HDFC Sec note is that:

(a) NHAI will have to continue to raise debt to payback interest till about FY 25, when debt will peak out and then there will be no subsequent material investments. This was the key theme raised by Prof Bakshi.
(b) Toll in various forms will start kicking in from FY 20, including securitization of toll (I guess so, not clear), which will increase and till such time it increases to repay debt on its own, external funding is assumed
( c) Based on HDFC Sec assumptions (which it says is built with a margin of safety), the entire debt payback under those assumptions will be by FY 43

I hope this is helpful!


Excellent article about Talwalkars in Moneylife.

From the article.

the fall of the Talwalkars, India’s largest fitness group, is not about a business gone bad due to the economic slowdown. Like DS Kulkarni, and Punjab and Maharashtra Cooperative Bank (PMC Bank), this appears to be a case of brazen fudging of turnover and membership numbers and cooking up profits

Additionally from the latest annual reports, we can see that the directors’ remuneration was very low.

For Talwalkars Better Value Fitness:

For Talwalkars Lifestyle:

Can abnormal management remuneration be used as a factor in company analysis?


Some common traits of fraud/suspect management are to come on TV to explain displeasure about falling stock price, Gaming investor with Demerger Merger pr to unlock value idea, Dividend & Buyback etc to show owners are shareholder friendly( Now days even leveraged company want to do buybacks).


I recently wrote to SEBI asking for forensic audit details. I received a response stating that this is privileged information(!) and excluded from disclosure. The query is below and the response is attached
Please provide a list of companies where forensic audit has been ordered since 1 Apr 2016 and the soft copies of audit report wherever final report is submitted. This information is requested for learning as an individual investor how to avoid mine traps
ReplyDocument SEBI (1).pdf (66.5 KB)