Apex Frozen Foods' audit record is clean on its face, seven straight unqualified opinions with no Key Audit Matters, but that record sits alongside a pattern of promoter-led remuneration decisions that public shareholders repeatedly voted against, a SEBI insider-trading finding, and a ₹13.09 crore income-tax settlement the company has not recorded in its books.
Key findings
- Promoter directors exceeded pay limits, then used their 72.62% control to pass waivers and a cap increase against public opposition
Major- For FY2023-24, three promoter directors exceeded statutory remuneration limits by ₹63.57 lakhs, ₹51.17 lakhs and ₹30.07 lakhs because profits were inadequate. At the 27 September 2024 AGM, shareholders waived recovery of that excess; Public Institutions voted 100% against, promoters 100% in favour. A year later, shareholders raised the managerial remuneration cap from 16% to 26% of net profits, with Public-Non Institutions voting 53.36% against. - SEBI found insider trading by promoters, directors and KMPs around the 2017 listing, imposing penalties and a two-year market ban
Major- SEBI orders dated 29.12.2022 and 28.03.2023 imposed penalties of ₹11,00,000 to ₹18,14,000 on four individuals for insider trading during September 2017 to February 2018. The order dated 28.03.2023 barred the CMD, his wife and son-in-law from markets for two years and imposed a disgorgement order against them. The three have appealed to the Securities Appellate Tribunal. - Apex restated prior-year profits, booked a settlement without the income, and recognised an EPCG grant with its export obligation unperformed
Major- A prior-period error under Ind AS 8 restated retained earnings downward by ₹7 crore as at 01.04.2021. The company recognised a ₹2.36 crore EPCG capital grant while its entire export obligation of 6 times duty saved remained unperformed. The ₹13.09 crore settlement order was passed during FY2022-23, but the company stated it "has not recorded the transactions of the said income". - A ₹13.09 crore settlement order with tax liabilities provided, plus unresolved market-fee and land-advance exposures
Major- The Interim Board for Settlement passed an order determining additional income of ₹13.09 crore for FY2011-12 to FY2017-18, with corresponding tax liabilities provided/remitted in current and earlier years. The company filed a settlement application dated 26-Dec-2019. The High Court of AP issued an interim order suspending the government order on the 1% market fee, leaving the company contingently liable depending on the final order. It also paid ₹2.39 crore plus ₹24.48 lakh stamp duty for land purchases where registrations were not completed. - Debt has fallen sharply, but borrowing relies on promoter personal guarantees and pledged residential property
Minor- Total debt reduced to approximately ₹5.7 crore as of 31 March 2026, with debt-to-equity at 0.01x versus 0.15x the prior year. Working capital facilities are personally guaranteed by the two promoter-directors and secured by equitable mortgage of the MD's residential properties. Fixed deposits of ₹26.48 crore are pledged against Bank of India and Kotak Mahindra Bank working capital lines. - Revenue quality is pressured by customer concentration in a weak US market, with recurring receivable write-offs
Minor- Net revenue fell to ₹162 crores in FY24 from ₹212 crores in FY23 due to subdued US demand and lower global shrimp prices. FY23 other expenses included a ₹7.46 crore write-off of receivables, up from ₹1.34 crore in FY22, while the impairment allowance remained Nil. Receivable days stood at 42.54 in FY26, down from 56.97 in FY25. - Auditor rotation proceeded on schedule, but fees nearly doubled after the 2022 switch while profitability collapsed
Minor- Padmanabhan Ramani & Ramanujam was appointed for five years from the 23.07.2022 AGM at ₹10,00,000 per annum. Total auditor fees rose from ₹10.00 lakhs in FY2022 to ₹16,00,000 in FY2023 and ₹18,00,000 in FY2024 and FY2025. No auditor resignation was reported in FY2022, FY2023 or FY2025.
What to watch
- SAT appeal. Outcome of the appeal against the SEBI order dated 28.03.2023 not disclosed in the FY2025-26 Annual Report.
- Final dividend. Proposed ₹2.50 per share for FY2025-26, subject to approval at the 14th AGM.
- Market fee case. Final order of the High Court of AP in WP No:15437 of 2022 on the 1% market fee increase.
- Charge satisfaction. Six charges of ₹93.38 crore pending with ROC Andhra Pradesh, awaiting lender NOC, as of the FY2024-25 Annual Report.
Bottom line: This is a disclosed and audited record with a genuinely clean opinion history and sharply reduced debt. The risk is concentrated in governance: promoter directors who set their own pay above statutory limits, a SEBI finding of insider trading, and a tax settlement that admits unrecorded income the company has not booked. Watch the SAT appeal and the AGM resolutions, and read the remuneration and tax lines with that pattern in mind.