Fluidomat Ltd's record is built on seven consecutive years of unqualified audit opinions and a clean CARO annexure, with no debt and improving returns. The minor findings that follow concern a dissolved UK subsidiary, a concentrated promoter board, rising receivables, volatile cash conversion, and an auditor rotation, none of which point to fraud or material loss, but each is worth understanding before you read the next annual report.
Key findings
- A dormant UK subsidiary absorbed ₹2.6 crore, was never audited, and was dissolved in June 2023
Minor- Fluidomat UK Private Limited was incorporated on 26 June 2019 and had not commenced commercial activities as of 31 March 2020. The original cost of the investment was ₹2.6 crore as of FY2022-23, up from ₹80.00 lakhs the previous year. Its financial statements were unaudited in both FY2020-21 and FY2022-23, with the consolidated auditor's opinion based on management-prepared statements. The Board passed a resolution for strike-off on 11 February 2023, the subsidiary filed a voluntary strike-off application on 15 March 2023, and it was dissolved on 13 June 2023. Fluidomat had no subsidiaries, associates, or joint ventures as of FY2025-26. - All three executive director seats are held by the promoter family, with the 77-year-old CMD seeking a further term to age 80
Minor- The Board comprises three executive directors, Shri Ashok Jain (CMD), Shri Kunal Jain (Whole-time Director), and Mrs. Radhica Sharma (Jt. Managing Director), all belonging to the promoter group. Shri Ashok Jain, aged about 77, is proposed for re-appointment as CMD for 3 years from 1 July 2027 at remuneration not exceeding ₹7,00,000/month, requiring a special resolution because he has crossed age 75. Special resolutions for all three were sought because their aggregate annual remuneration exceeds 5% of net profits under Section 198 of the Companies Act, 2013. Promoter shareholding stood at 53.45% with pledge at 0.65% as of the latest FY. - Receivables have grown faster than revenue, and customer credit exposure has more than quadrupled in five years
Minor- Maximum exposure to credit risk (trade receivables and current investments) rose from ₹8.76 crore as at 31 March 2020 to ₹42.65 crore as at 31 March 2026. Receivable days were 108 in FY23, 115 in FY22, 115 in FY21, and 118 in FY20. Revenue is recognized on transfer of control; sale of products at point in time (shipment or delivery); services over time. - Cash conversion is volatile and weak on a cumulative basis, while a large internal-accruals-funded expansion is underway
Minor- Fluidomat's cumulative CFO of ₹20 crore covered only 0.69x of cumulative operating profit of ₹29 crore over the five years FY19-FY23. CFO/PAT fell to 0.53x in FY23 (CFO ₹5.08 crore vs PAT ₹9.62 crore) after 1.10x in FY22 and 0.61x in FY21. CWIP tangible assets rose to ₹4.22 crore as at 31 March 2026 from ₹1.89 crore a year earlier, with no CWIP completion overdue or cost exceeded original plan. The company announced a modernisation and expansion programme financed through internal accruals, including upgrades to foundries, CNC machines, testing beds, a material-testing laboratory, and 86,988 sq. ft. of civil construction. ROCE improved to 26.16% in FY23 from 17.95% in FY22, 14.57% in FY21, and 12.70% in FY20. - Fluidomat rotated its statutory auditor from C.P. Rawka & Co. to J.P. Saraf & Co. in 2022, with no resignations since and modest audit fees
Minor- M/s J.P. Saraf & Co., Chartered Accountants was appointed as statutory auditors for a first term of 5 consecutive years from the conclusion of the 46th AGM until the conclusion of the 51st AGM in calendar year 2027, with shareholder approval obtained at the AGM held on 28 September 2022 by 99.5337% of votes polled. The statutory auditor for FY2021-22 was C. P. Rawka & Co., whose proprietor signed the audit report dated 30 May 2022. The CARO annexures for FY2021-22, FY2022-23, FY2024-25, and FY2025-26 each state that there was no resignation of statutory auditors during the respective year. Statutory auditor remuneration was ₹2.40 lakhs (audit) plus ₹3.32 lakhs (certification) for FY2025-26. - Seven consecutive years of unqualified audit opinions with clean CARO clauses, interrupted only by a one-time audit-trail gap in FY2024 and a small professional-tax arrears item in FY2025
Minor- The standalone audit opinion was unqualified in each of FY2020 through FY2026, with the auditor stating the financial statements give a true and fair view as at each balance sheet date. The auditor reported the accounting software audit trail (edit log) feature was operated throughout FY2024 except from 01 April 2023 to 04 July 2023, with no tampering found. The auditor reported statutory dues arrears outstanding for more than six months of ₹15,780 (Professional Tax Employee, Kolkata Branch) as at 31 March 2025, with no other arrears. The auditor reported no material fraud by or on the Company noticed or reported during FY2021, FY2023, FY2024, FY2025 and FY2026, with no Form ADT-4 filed and no whistle-blower complaints received in any of those years. - Fluidomat's only material contingent litigation, its own NCLT petition against BGR Energy Systems, was settled in October 2024 for ₹1.61 crore
Clean- Fluidomat executed a full and final settlement agreement with BGR Energy Systems Ltd on 08.10.2024 regarding Company Petition (IB) No. 80/9/AMR/2022 before the NCLT Amravati Bench, under which total payment of ₹1,61,00,000 was received, comprising ₹1,56,00,000 previously paid and ₹5,00,000 paid on 08.10.2024 as compensation to the Operational Creditor. The NCLT Amaravati Bench dismissed the petition as withdrawn and disposed of on 14.10.2024. The CARO report for FY2021-22 stated that no dues were outstanding on account of any dispute except as listed in the standalone financial statements.
What to watch
- UK subsidiary investment recovery. The company stated the ₹2.6 crore investment would be realized after receiving an order/notification from UK Companies House, subject to FEMA compliance, as disclosed in the FY2022-23 Annual Report.
- CMD re-appointment. Shri Ashok Jain's re-appointment as CMD for 3 years w.e.f. 1 July 2027 is subject to shareholder approval at the ensuing AGM.
- Auditor term expiry. The current 5-year term of J.P. Saraf & Co. LLP as statutory auditor expires at the conclusion of the 51st AGM in calendar year 2027, when a new appointment or rotation decision is required.
- Final dividend approval. The proposed ₹7.50 per share final dividend for FY2025-26 is subject to AGM approval, as disclosed in the FY2025-26 Annual Report.
- Expansion programme progress. The modernisation and expansion programme, financed through internal accruals, is anchored to the FY2025-26 Annual Report.
Bottom line: This is a disclosed and audited record with a clean audit opinion for seven straight years, no debt, and improving returns. The risk sits in a few places: a promoter family that holds all executive seats and has raised its own pay, receivables that have grown faster than sales, and cash conversion that has been weak on a cumulative basis. Watch whether the UK investment is recovered, whether the CMD's term is extended to age 80, and how the internal-accruals-funded expansion progresses.