Creative Graphics Solutions India Ltd presents a mixed record: six years of unqualified audit opinions and a routine auditor rotation sit alongside a dense web of related-party credit, negative cumulative operating cash flow against reported profits, and recurring audit call-outs on gratuity and MSMED provisioning that the auditor has never quantified.
Key findings
- Reported profits have not converted to cash over six years
Major- Cumulative operating cash flow was ₹-18 crore against cumulative profit of ₹66 crore excluding other income of ₹15 crore, a conversion ratio of -0.36x. FY26 operating cash flow was ₹-8.99 crore against profit of ₹18.76 crore, following ₹-22.24 crore against ₹20.77 crore in FY25. Free cash flow was negative in each of FY23, FY24 and FY25. Long-term borrowings "nearly doubled" to fund Bangalore and Oman investments, and IPO proceeds were redeployed to subsidiary Wahren's working capital with shareholder approval via postal ballot as of November 7, 2024. - Unqualified opinions, but recurring Emphasis of Matter paragraphs on compliance lapses
Major- The FY2026 standalone opinion was unqualified, signed by RCA & Co LLP on 21 May 2026. However, the report carries an Emphasis of Matter that no gratuity provision was made under Ind AS-19, and another that no MSMED interest was provided, with profit impact not ascertainable in both cases. The FY2026 CARO also notes the internal audit report was not made available to the auditor, and that working capital statements to the bank excluded trade receivables over six months and used provisional trade payable figures. - Borrowings understate the group's economic obligations
Major- Term loans in FY2026 are secured against hypothecation of vehicles and machinery and equitable mortgage of immovable property owned by the director and company. Unsecured loans from corporate bodies are repayable on demand. The group's gearing ratio is defined as net debt (borrowings net of cash) divided by total equity. Finance costs on term loans rose from ₹264 lakhs in FY2025 to ₹479 lakhs in FY2026, while cumulative operating cash flow over six years remains negative at ₹-18 crore. - A small income-tax demand is the only disclosed contingent liability, but filings contradict each other
Minor- The standalone and consolidated financial statements both disclose an income tax demand of ₹66.46 lakhs as at March 31, 2026, under appeal. A corrigendum dated 3 September 2026 states the demand is ₹95.52 lakhs (including interest) for A.Y. 2020-21, pending before the Commissioner of Income Tax (Appeals). The FY2022-23 annual report disclosed no contingent liabilities. - Promoter family consolidates executive control
Minor- Sarika Goel, spouse of Managing Director Deepanshu Goel, was appointed Whole-time Director for five years effective 25.09.2026 to 24.09.2031, subject to shareholder approval. The board comprised 5 members as at 31 March 2026: 2 Executive Directors (promoters), 1 Non-Executive & Non-Independent Director, and 2 Independent Directors. Promoter shareholding stood at 68.07% with zero pledge. - Statutory auditor rotated on schedule with no adverse actions
Clean- M/s. Yogesh Kansal & Company completed its second five-year term at the conclusion of the 11th AGM for FY ending March 2025. M/s RCA & Co. LLP was appointed at the Board meeting held 26 August 2025 for five consecutive years through the 16th AGM. CARO responses for both FY2022-23 and FY2025-26 state there was no resignation of the statutory auditor during the year.
What to watch
- Related-party receivables collection. Whether the 2.99 crore related-party trade receivables outstanding as at March 31, 2026 (primarily from Eunoia Graphics Pvt. Ltd.) are collected or written off, in the next annual report (FY2026-27).
- Internal sales to Wahren. Whether internal sales from Creative to Wahren continue and at what volume, following management's H2 FY26 disclosure of the arrangement, in the next annual report (FY2026-27).
- Gratuity and MSMED provisioning. Whether the auditor's Emphasis of Matter on gratuity non-provisioning and the MSMED interest non-provisioning continue in the FY2026-27 annual report and whether the profit effect is quantified.
- Income tax appeal. Resolution of the appeal before the Commissioner of Income Tax (Appeals) for A.Y. 2020-21, with the disputed amount stated as either ₹66.46 lakhs or ₹95.52 lakhs.
Bottom line: This is an audited record with a clean opinion and a routine auditor rotation, but the substance sits in the gaps the auditor keeps flagging: profits that do not convert to cash, related-party credit without repayment schedules, and accounting-standard departures that are disclosed but never quantified. The risk is a company whose reported growth is financed by debt and related-party arrangements rather than operating cash generation. Watch the next annual report for whether the interest free loans & advances aggregating to 22.31 crore get repayment dates, whether the 2.99 crore receivables are collected, and whether the gratuity and MSMED call-outs are finally quantified.