"Singhavalokana" : Marketing gimmick or actual value creation for shareholders

While going through the annual report for Sona Comstar (an Indian Automotive Supplier and listed script) today, I came across this word "Singhavalokana" which means and I quote the definition provided in the report "it is believed that after a lion has traversed a meaningful distance in the jungle, it looks back to examine the path it chose, and this is referred to as ‘Singhavalokana’ in Sanskrit.

CEO, Vivek Vikram Singh (VVS) calls out interesting industry adopted practice of only calling out acts of "commission" in their annual reports while leaving out acts of "omission". In simple lingo, he is trying to apprise his stakeholders of the business decisions where he said "No"

What could be some of these decisions?

1. Entering a new business line

2. Forging a new partnership / tech licensing agreement with US/Europe R&D focused provider

3. Acquiring / part stake acquisition in a business and others

Why would VVS want to tell aloud to the world that I failed in XYZ or said "No" to Y profitable venture?

There can be couple of honest reasons why a CEO would do that:-

1. It keeps the CEO vulnerable : Being the CEO it is easy to consider that they are best, but by telling to the world that of the 52 opportunities that came to his door, he said no to 45, he is making himself open to judgements and public criticism

   
   

2. Signaling that he knows his business : An organization cannot do everything, they have to be focused in what all they want to enter and how they make best out of it. Among the 52 opportunities that tapped his door, only a handful would be profitable from a long-term shareholder value creation

   
   

3. Signaling new growth opportunities : When you tell to the world you had 52 business opportunities, you also tell to the world that these are the lines of business where we have accretive synergies. Where we can enter without much hassle, where long-term value can be created at the right time

While the idea is good, I will have to still rate the exercise here as more of marketing gimmick because :

1. Average investor like me fails to find these 52 opportunities in the annual report submission. Why can we have a 1 page table listing those opportunities and rationale behind not moving ahead. We could have left behind the perceived business outcomes to individual investors

   
   

2. There is no subtle signaling about new growth opportunities; for the fiscal ~70% of the new order book is filled with EV programs. While in my view, this should have been called as a risk, the same has not been done and considering 26% of the revenue is flowing from Europe geography which is under significant stress