ASSOCIATED ALCHOLS & BREWERIES LTD accounting problem highlighted

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by ramram, Jan 13, 2016.

  1. ramram

    ramram New Member

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    First I would like state That even though there is a thread in this same name I started this new because I wanted to highlight the aspect accounting problems and number fudging in Various small cap companies I have already posted the positive aspects of this company many times in this forum and hence felt responsible to bring this to the notice of members.
    This time when I was in Indore again I visited them and asked the following doubts from the AR 2015
    As per the ar the median salary is 1.28 lac for 301 employee the key management consists only of two people Ashish Gadia and Deepak drawing only around 7 lac
    Whereas the two directors are taking 3 cr each
    The related party transaction shows 6 cr as salary paid
    The other expenses fy 15 67 cr also shows a substantial increase and you basis there is drastic increase In other expenses even though they have captive power.
    My question was to them to explain the above.
    I also raised the doubt about 32 cr loan and guarantee extended to the related party.
    Thirdly the Independent auditor remark regarding the the transactions under taken in related party names
    And about the even segmenting the revenue under bottling and capative that is under licence do manufacturing and only bottling as per cenvat requlations
    None of the above questions were answered by there CFO nor anybody is willing to share any sort of info ration regarding the sudden increase in employee cost I even went to there auditors office there also same story.
    Above all they were rude and dismissed me by telling that if don't like sell the share and go away why worry.
    This I wanted to bring to notice of the forum members because I thought I am also responsible since I have given earlier positive feed back about this company and I started anew thread with this mind.
    I may be wrong because of my limited knowledge in accounting procedures but I was worried at the transparency level of the management and there attitude towards a minority share holder shows there is something wrong in the quality aspect
    I think this is what ayush was also trying to highlight hope it is helpful
    I want senior members to highlight to retail investors like us to find such accounting problems in various small cap companies.
    i just copy pasted it because in many small cap companies valuvations are runnning high without fundamanetals invite comments
     
    San8422 likes this.
  2. Guru Vachaal

    Guru Vachaal Let's discuss the fundamentals..

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    Dear RamRam:- Companies are NOT LIABLE to answer each and every investor query. SEBI has given them right to reject any question raised by shareholders. That is what I was told by SEBI reps on phone.

    But one thing is sure that Your profile name is as holy as your honesty. You came back and shared every information you had. Goodluck to You.
     
  3. San8422

    San8422 Active Member

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    Thanks will stay away.
     
  4. amit arora

    amit arora New Member

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    Today I noticed that they have announced bonus shares is that not a good sign

    Board to consider bonus shares 13/01/2016
    [​IMG] Revision in Credit Rating 13/01/2016
    [​IMG] Financial Results & Limited Review Report for Sept 30, 2015 (Standalone) 14/11/2015
    [​IMG] Board Intimation for Results & Closure of Trading Window 02/11/2015
    [​IMG] Appointment of Company Secretary and Compliance Officer 31/10/2015
    Also see the CARE RATING DETAIL

    [​IMG]
    Rating Rationale

    The revision in the ratings assigned to the bank facilities of Associated Alcohols and Breweries Limited (AABL) takes into account continuous increase in its scale of operations on the back of steady growth in the sales volume of country liquor (CL) and Extra Neutral Alcohol (ENA). The revision in the ratings also factors improvement in its profitability, leverage and debt coverage indicators during FY15 (refers to the period April 1 to March 31).

    The ratings continue to derive strength from the long-standing experience of the promoters of AABL in liquor industry, established operations in the state of Madhya Pradesh along with assured off-take of CL on back of district-wise quota system and favourable demand outlook for alcoholic beverages in India due to increase in per capita income as well as changing lifestyles.

    The ratings are, however, constrained on account of susceptibility of its operating margins to volatility in the prices of its agro-based raw materials, geographical and product concentration risk as well as its presence in a highly regulated alcoholic beverages industry characterized by high taxes and stringent government controls.
    AABL’s ability to maintain growth in scale of operations along with increase in sales volume of high margin IMFL and ENA segments, expand its geographical presence and improve its profitability margin by managing volatility associated with its agro-based raw materials amidst a competitive and highly regulated environment would be the key rating sensitivities.

    Background

    Incorporated in 1989, AABL is a public limited listed company and the flagship entity of the Indore-based Kedia group promoted by late Mr Bhagwati Prasad Kedia. AABL is the second largest distillery in Madhya Pradesh (MP) and is engaged in the manufacturing of potable alcohol, ie, Rectified Spirit (RS), ENA, CL and IMFL with an installed capacity of 104 kilo litre per day (klpd) and undertakes bottling of IMFL for Diageo India Private Limited (Diageo). AABL’s distillery and bottling facility is located at Khargone, MP. AABL also has a wind-based power plant of 0.75 megawatt in Tamil Nadu.

    In 2009, the Kedia group had also setup a brewery unit under AABL’s associate company, Mount Everest Breweries Limited [MEBL; rated ‘CARE BBB+ (SO) / CARE A2 (SO)’]. MEBL undertakes contract manufacturing of beer for United Breweries Limited (UBL); apart from manufacturing and selling beer under its own brands ‘Le Mont’, ‘Mount’s 6000’ ‘Dabang’ etc. Having sold more than 1 million cases of ‘Mount’s 6000’ in a calendar year, it has become a millennium brand for MEBL. The company has an assured off take arrangement to the extent of 18 lakh-cases of beer per annum with UBL. MEBL operates with an installed capacity of 4 lakh Hectoliters (51.28 lakh cases) of beer per annum at its facility located at Memdi, Indore, MP.

    The Kedia group is currently owned and managed by Mr Anant Kedia and Mr Prassan Kedia along with their family members/associate concerns. For analytical purpose, CARE has taken a combined view of AABL and MEBL due to their managerial (common promoters) and financial linkages (AABL has extended a corporate guarantee for the bank facilities availed by MEBL); apart from being present in similar business (alcoholic beverages).










    [​IMG]
     
    Last edited: Jan 14, 2016
  5. Tilak Sharma

    Tilak Sharma New Member

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    i think the salary is paid to mount everest brewries ltd which is the associate company and they have decalred it in there annual report only if they have hide the fact then it is wrong but since it is declared it is ok generally you dont question the promoters like this it is better to understand the growth prospects with there association with high profile clients like diageo and united spirits this stock will be rerated soon dont panic
     
  6. Vivek Gautam

    Vivek Gautam New Member

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    What's your take on Associated Alcohol at cmp Tilakraj Ji.
     
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