Pix Transmission – low profile smallcap company

Hi Nirvana,

My thoughts on your points:

1. Salary – yes, it’s a bit high and I hope the management takes note of it and takes steps to stop increasing the same and reward themselves by way of dividends etc.
   But this is not a deal breaker for me. Usually I have seen that in small/mid caps it happens as there are several family members involved (and some CAs advice to charge the max amount allowed) and it’s better that they take remuneration upfront rather than through wrong/hidden ways. Infact the other way I think is – if the margins are so good despite such salaries then it means that the core profitability is even higher and its good for longer term.
2. As you mentioned, interest looks reasonable.
3. In almost all audit reports, one will see the same language for foreign subsidiaries. No Indian auditor will take responsibility as they don’t audit themselves. Regarding the steep increase – i think it might be due to the reason that they have appointed MSKA. MSKA is a very big and reputed firm…i think it is amongst top 10 or so. If so then charges will be higher and it’s good that the co is getting better auditors.

Plz share if I’m wrong somewhere.

Thanks,
Ayush
Disc: same as before