Perfectpac's audit record is clean on its face: seven consecutive years of unqualified opinions with no Key Audit Matters, and a debt position that is fully disclosed and secured. The recurring theme to understand is governance concentration, a promoter Managing Director whose pay repeatedly needs special shareholder approval, a 74.83% promoter holding, and a related-party web that the company consistently declares immaterial.
Key findings
- Promoter MD's pay repeatedly exceeds statutory profit-linked limits, approved by special resolutions
Major- Shri Sanjay Rajgarhia, promoter and Managing Director, is proposed for re-appointment for three years from July 01, 2027, with remuneration capped at Rs. 1.50 crore per annum, exceeding Section 197 limits and falling back on Schedule V minimum pay when profits are absent or inadequate. His pay was approved by special resolution at the 50th AGM (September 15, 2022) and again at the 2023 AGM, with the same cap and fallback. The promoter group holds 74.83% of shares with zero pledge, and promoter votes carried all resolutions at the 2025 AGM with no votes against. - Revenue mix shifted sharply in FY2024, with services collapsing and "other operating revenues" appearing
Minor- Sale of services fell from 5.53 crore in FY2023 to Rs 0.88 lakhs in FY2024, while other operating revenues of 5.08 crore appeared for the first time, with total revenue rising only modestly from 99.93 crore to 101.12 crore. The FY2024 revenue base was Sale of Products 96.03 crore, Sale of Services Rs 0.88 lakhs, and Other Operating Revenues 5.08 crore. - Cash generation has consistently exceeded profit, but the gap narrowed sharply in FY2026
Minor- Operating cash flow covered PAT in each year from FY2022 through FY2025, 5.46x, 2.47x, 2.17x, and 1.29x, but fell to 0.72x in FY2026 (CFO Rs. 2.27 crore vs PAT Rs. 3.15 crore). ROCE declined from 15.29% in FY2024 to 11.57% in FY2025 and 10.25% in FY2026, while the company recommended a flat Re. 1.00 dividend for FY2025-26. Book overdrafts are shown within Other Financial Liabilities and form part of Cash and Cash Equivalents in the FY2025-26 cash flow statement. - Reported profit is shaped by recurring restatements, an exceptional charge, and management-certified valuations
Minor- FY2025-26 recognized a Rs 12 lakhs exceptional item for estimated past service cost from New Labour Codes, with the company stating it "will review estimates as clarifications/rules are notified". Cash flow notes in FY2022-23 through FY2025-26 each state "Previous year figures have been restated wherever necessary," with no specific items or amounts disclosed. Waste inventories are valued at estimated realizable value "as certified by management" in FY2024-25 and FY2025-26. - Repeated BSE fines for late filings, with the latest report denying any penalties
Minor- BSE imposed a Rs. 5,000 fine for late related-party transaction disclosure for the half year ended September 30, 2021, and a Rs. 20,000 plus GST fine for late corporate governance filing for the quarter ended March 31, 2019, paid on January 07, 2020. The FY2025-26 Annual Report states no strictures or penalties were imposed by Stock Exchange, SEBI or any statutory authority in the last three years. - Seven years of "no material related-party transactions" alongside a stable promoter-linked entity web
Minor- The Board reported "no materially significant related party transactions" in every year from FY2019-20 through FY2025-26, with Form AOC-2 deemed "not applicable". The related-party universe remained consistent, including Orient Syntex, Essvee Fiscal LLP, Rajgarhia Leasing & Financial Services (renamed Clayhill Capital), and Faridabad Paper Mills. A related-party financial asset of Rs. 19.79 Lakhs as at 31.03.2025 is described as "Security against rent given to Managing Director". - Long-tenured statutory auditor with no resignation, qualification, or regulatory action disclosed
Minor- V S S A & Associates (FRN 012421N) served as statutory auditor for FY2025-26, with the Board's Report stating the audit report contains no qualification, reservation or adverse remark. The firm was re-appointed at the 50th AGM on September 15, 2022 for a second five-year term till the 55th AGM in 2027. The same firm signed statements for FY2019-20, FY2020-21, FY2024-25, and FY2025-26, showing continuous tenure across at least FY2020 through FY2026. - Contingent liabilities consistently disclosed, with small disputed tax demands and a Supreme Court-stayed recovery
Minor- As at 31 March 2020, contingent liabilities included interest on Local Area Development Tax of Rs. 1.83 lakhs (recovery stayed by the Supreme Court), ESIC demands of Rs. 1.54 lakhs paid under protest and Rs. 3.09 lakhs contested, and disputed Income Tax of Rs. 0.21 lakhs. Auditors confirmed in FY2024-25 that pending litigations' impact was disclosed. No application was made or proceeding was pending under the Insolvency and Bankruptcy Code as disclosed in the FY2024-25 Annual Report. - Seven consecutive years of unqualified audit opinions with no Key Audit Matters or fraud reports
Clean- V S S A & Associates issued an unqualified opinion for FY ended 31 March 2026, with no Key Audit Matters and no Emphasis of Matter paragraphs. The audit opinion has been unqualified with no KAMs in every year from FY2019-20 through FY2025-26. CARO for FY2025-26 confirms no wilful defaulter declaration, no default in loan repayment, no benami property proceedings, and no undisclosed surrendered income. - Consistent external credit ratings and no undisclosed borrowings or defaults across five years
Clean- CRISIL reaffirmed long-term CRISIL BBB-/Stable and short-term CRISIL A3 ratings on bank facilities in FY2019-20, FY2021-22, FY2022-23, FY2023-24, and FY2024-25, with no revision during FY2025-26. As of February 3, 2025, total financial indebtedness was 0 INR crore with 0 defaults. Borrowings are secured by first and exclusive hypothecation charge on all existing and future receivables, current assets, movable assets, movable fixed assets and equitable mortgage of factory land and building, and also secured by personal guarantee of Managing Director. The Company has used borrowings from banks and financial institutions for the specific purposes for which taken at the balance sheet date, reported consistently across FY2021-22 through FY2025-26.
What to watch
- Shareholder vote on MD re-appointment. The 54th AGM will vote on Shri Sanjay Rajgarhia's re-appointment for July 01, 2027 to June 30, 2030.
- Auditor re-appointment. V S S A & Associates' term runs till the 55th AGM in 2027, when re-appointment will be proposed.
- Vehicle loan maturities. Kotak Mahindra Prime Limited vehicle loan had 8 instalments outstanding as of March 31, 2025, with maturity in November 2025. Mercedes Benz Financial Services vehicle loan had 21 instalments outstanding as of March 31, 2025, with maturity in December 2026.
- Exceptional cost estimate review. The company will review the Rs 12 lakhs past service cost estimate as clarifications under New Labour Codes are notified, per the FY2025-26 Annual Report.
- FY2026-27 Annual Report. Expected around August 2027, this will show whether the related-party disclosure pattern continues, particularly the Rs. 19.79 Lakhs security deposit against rent to the Managing Director.
Bottom line: This is a cleanly audited record with real cash generation, a fully secured and disclosed debt position, and no fraud or default flags across seven years. The risk character is governance concentration: a promoter family holding three-quarters of the shares, a Managing Director whose pay repeatedly needs special approval, and a related-party web that is consistently declared immaterial. Watch the shareholder vote on his re-appointment and whether the related-party disclosure pattern holds in the next annual report.