SMC Global Securities Limited

4️⃣Traditional Metrics Won’t Save You Most investors stick to traditional metrics like: → P/E ratio → EPS growth → ROE/ROCE But fraud rarely screams from these metrics It takes its information from: → Notes to accounts → Unusual working capital patterns → Auditor

Now, enough with Gensol case....let's see how we can do our best to avoid other fraudulent companies in the market! Let's see how forensic accounting helps in that!

6️⃣Real-World Cases Where Forensic Checks Could've Helped 🟥Satyam Computers — Ghost employees, fake profits 🟥DHFL — Round-tripping and fake books 🟥Talwalkars — Cash vs debt mismatch 🟥Gensol Industries — Shell entities Each had clear forensic red flags—missed or ignored.

9️⃣ Your Next Steps If you want to level up your investment due diligence? ✅Learn how to read footnotes ✅Track cash flow alongside net profit ✅ Investigate auditor reputation & changes ✅ Question sudden growth stories ✅ Ask: Where’s the cash? Because profits are opinion,

[5] Governance and Leadership Fallout: Promoters Anmol Singh Jaggi and Puneet Singh Jaggi were found responsible for the misdeeds. SEBI barred them from: ↳ Accessing the securities market ↳ Holding managerial/directorial positions at Genteel ↳ Both resigned from the board

8️⃣ Bottom Line If you’re not doing forensic checks before investing... You’re not investing. You’re guessing. Learn it. Or rely on experts who specialize in it. But don’t skip it.

5️⃣Key Forensic Red Flags Every Investor Should Track 🔸Constant change in auditors 🔸Huge receivables compared to revenue 🔸Declining or negative operating cash flows 🔸Promoter share pledging 🔸Sudden jump in “Other Current Assets” 🔸High % of sales to related parties One

3️⃣What is Forensic Accounting? It’s not just balance sheet reading It’s investigative accounting It answers deeper questions: 🔍Are profits backed by real cash? 🔍Are sales genuine—or just entries on paper? 🔍Are assets overvalued or fabricated? It reads between the lines

[4] Diversion of Funds for Personal Use: Funds meant for EVs were allegedly diverted to promoter-linked entities Some were used for personal luxuries like a high-end apartment and money transfers to relatives or private firms owned by the promoters