EL Forge’s record has been clean on audit since FY2023, with all CARO checks on fraud, default, and fund diversion coming back clear. Two things sit unresolved: a legacy UK associate that the company’s own filings say does not exist, and a receivables-and-inventory build-up that has not been explained with customer-level detail.
Key findings
- A former UK subsidiary became an associate but was never valued, and the company now says it has no associates
Major- Shakespeare Forgings Ltd ceased to be a wholly owned subsidiary in February 2015 and became an associate, yet its financial statements were never prepared and no loss or diminution was booked. The FY2020 audit was qualified because the investment was not measured at fair value. From FY2022 through FY2026, every Corporate Governance report states the company has no subsidiaries, and the FY2023 CARO report adds that it has no associate or joint venture either. - Receivables and flash-stock inventory jumped alongside revenue, while customer risk stays unquantified
Minor- Revenue rose 45% to Rs. 58.46 crore in FY23, but trade receivables not past due grew 87% to Rs. 3.72 crore with no impairment recorded. Flash Stock in inventory climbed 166% to Rs. 1.03 crore in the same year. The company reports two segments, including a Land and Development segment, though management stated in FY25 and FY26 that no land-sale income was earned. - Audit opinions have been unqualified since FY2023, and all CARO clauses are clean on fraud, default, and fund diversion
Clean- The FY2026 audit is unqualified with no Key Audit Matters, and the auditor confirmed the accounting software audit trail operated throughout the year without tampering. CARO clauses for FY2026 report no fraud, no wilful default, no Benami proceedings, and no fund-conduit concerns. The gratuity qualification that had repeated since 2015 was resolved in FY2023 when the full liability was paid to the LIC Gratuity Fund.
What to watch
- Next-generation executive director terms. Mr. K. R. Srihari’s and Mrs. Ananya Srikanth’s appointments run to 17th June 2031 with minimum remuneration guaranteed regardless of profits.
- Vice Chairman’s term. Mr. K.V. Ramachandran’s reappointment runs to 31st March 2030, also with guaranteed minimum remuneration.
- Excise duty demands. Nineteen disputed excise duty demands totalling ₹2.28 crore remain pending before CESTAT Chennai as of the FY2024-25 annual report.
- Lapsed slump-sale advance. The ₹7,056.02 advance from a lapsed MOU is held as a liability and requires fresh negotiation, as disclosed in the FY2022-23 annual report.
Bottom line: This is a small company with a now-clean audit trail and no evidence of fraud or default. The record is shaped by two unresolved threads: a legacy UK associate that the company’s own filings disclaim, and a receivables-and-inventory build-up that has not been broken down by customer. Watch whether the expanded independent-director board alters the voting pattern that has delivered near-unanimous promoter-driven outcomes, and whether Shakespeare Forgings Ltd finally appears in the books or is formally written off.