Deep dive into Deep Industries Cashflow REDFLAGS!
Interesting accounting red flags in Deep Industries's Deep Troubles
#Redflags
Interesting accounting red flags in Deep Industries's Deep Troubles
#Redflags
The story begins in Sep-22, when company recorded dividend from its dubai wholly owned subsidiary dividend in the consolidated FS, which should not be added in the Other income of Conso FS.
Let's understand it step by step.
Let's understand it step by step.
Other Income by Deep Industries
Q1 FY23 - 2.32 Cr
Q2 FY23- 9.78 Cr
Q3 FY23- 1.95 Cr
Q4 FY23- 5.15 Cr
YTD
Q1 - 2.32 Cr
Q2(6M) - 12.11 Cr
Q3(9M) - 14.06 Cr
Q4(Full Yr) - 11.24 Cr
For full yr, ideally it should be 19.2 Cr, but Other income reported as 11.24 Cr(difference of 7.96Cr)
Q1 FY23 - 2.32 Cr
Q2 FY23- 9.78 Cr
Q3 FY23- 1.95 Cr
Q4 FY23- 5.15 Cr
YTD
Q1 - 2.32 Cr
Q2(6M) - 12.11 Cr
Q3(9M) - 14.06 Cr
Q4(Full Yr) - 11.24 Cr
For full yr, ideally it should be 19.2 Cr, but Other income reported as 11.24 Cr(difference of 7.96Cr)
In Consolidated FS, From Mar-23 onwards Other Income was reduced from reported figures in Sep-22 i.e.
Half Yr ended Other Income - 12.11 Cr(Img1)
FY23 Other Income - 11.24 Cr (Img2)
(Lesser than the even half year reported figure)
Half Yr ended Other Income - 12.11 Cr(Img1)
FY23 Other Income - 11.24 Cr (Img2)
(Lesser than the even half year reported figure)
Now, Today they filed Q2 FY23 figures, where we can find the difference easily from Other Income.
6M Other Income 4.14 Cr vs earlier reported 12.11 Cr
To Your surprise - PAT reduced by almost 50%
Earlier reported Q2 FY23 PAT- 17.21 Cr
Current Year reported Q2 FY23 PAT- 8.6 Cr
6M Other Income 4.14 Cr vs earlier reported 12.11 Cr
To Your surprise - PAT reduced by almost 50%
Earlier reported Q2 FY23 PAT- 17.21 Cr
Current Year reported Q2 FY23 PAT- 8.6 Cr
Drama did not end here!
Here is some more-
Let's Begin Cash Flow Drama Now
Start with Basic Stuff
Consolidated Cash flow tagged as Standalone Cash flow.
Here is some more-
Let's Begin Cash Flow Drama Now
Start with Basic Stuff
Consolidated Cash flow tagged as Standalone Cash flow.
As per Cash Flow, Company recd dividend worth 7.99 Cr(Img1) where in Latest filed P&L says
"other income till Sep-23 is 4.14 Cr which is lesser than Dividend income".(Img2)
Dividend Inc (means other income should be higher than Dividend Inc) generally become part of Other Inc.
"other income till Sep-23 is 4.14 Cr which is lesser than Dividend income".(Img2)
Dividend Inc (means other income should be higher than Dividend Inc) generally become part of Other Inc.
In Cash flow, Dividend income to be reduced from the operating cash flow, and added in the Investing cash flow.
In last year's cash flow, a Similar thing happened, but this year, an Amount was added to Investing but it was not deducted from the Operating Cash Flow.
In last year's cash flow, a Similar thing happened, but this year, an Amount was added to Investing but it was not deducted from the Operating Cash Flow.
Complete Ignorance-
In Investing cash flow, both half yearly cash flows shows exact same figures for Purchase of Investments, Sale of Investments, Interest recd and Dividend recd.
Which seems very unusual on the face.
In Investing cash flow, both half yearly cash flows shows exact same figures for Purchase of Investments, Sale of Investments, Interest recd and Dividend recd.
Which seems very unusual on the face.
Last year, the Company declared a dividend worth 5.92Crs, and for that they earmarked the same with the bank.
This year, they did not even mention that what this 5.92 Crs?
Even in last yr, they did not mention clearly.(Img 2)
This year, they did not even mention that what this 5.92 Crs?
Even in last yr, they did not mention clearly.(Img 2)
So Let's understand What happened?
In Sep-22, Deep industries received 7.97 Cr worth of dividend from its wholly owned subsidiary Deep International DMCC
In Sep-22, Deep industries received 7.97 Cr worth of dividend from its wholly owned subsidiary Deep International DMCC
Same can be tracked in last half yearly Related Party disclosure by the company
In the case of Consolidated FS, if you receive any dividend from the subsidiary, You do not need to show it as an additional "Other income".
It will be eliminated during the preparation of consolidated FS.
This also lead to whole Cash Flow Drama as well.
It will be eliminated during the preparation of consolidated FS.
This also lead to whole Cash Flow Drama as well.
The company rectified the mistake from Mar-23 but did not mention it anywhere in the annual report.
Where as due to this, in Q2 alone there profit wiped out by 50%.
Where as due to this, in Q2 alone there profit wiped out by 50%.
Loading suggestions...