{ "docId": "019dd923-622c-750b-8b99-53ebe45211d2", "docSlug": "78ffe7ab28d4", "documentTitle": "Saputo Inc. (TSX:SAP)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2022-11-29 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 15, "pageCount": 147, "prevPage": 14, "nextPage": 16, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide uses a structured table format to present specific governance concerns.", "elementsJson": [ "headline_text", "paragraph", "callout_box", "comparison_table", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b99-53ebe45211d2/15", "deckHref": "/decks/019dd923-622c-750b-8b99-53ebe45211d2", "deckJsonHref": "/decks/019dd923-622c-750b-8b99-53ebe45211d2.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-53ebe45211d2#slide-15", "components": [ { "bbox": null, "kind": "callout", "text": "Also Deloitte's final note at Dairy Crest (U.K.) warning about the greatest potential for fraud around revenue recognition and \"topside journals\" is a big departure from its prior Independent Auditor Report.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0f1e-7015-9033-0cefe7ca1efb", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.86, "x": 0.07, "y": 0.17 }, "kind": "paragraph", "text": "Following our observations about abnormally high EBITDA margins reported in Argentina in 2021, Spruce Point is concerned by the recent auditor change from Deloitte to KPMG and an update to its Claw back Policy, which lowered the threshold for incentive recoupment. Furthermore, recently Saputo's long time Audit Chairman Tony P. Mati did not stand for reelection. Also Deloitte's final note at Dairy Crest (U.K.) warning about the greatest potential for fraud around revenue recognition and \"topside journals\" is a big departure from its prior Independent Auditor Report.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "af2c58bf-5f9d-4ea9-a5ec-bd6ecb4fb2e3", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "As a result of performing the above, we identified the greatest potential for fraud in the following area, and our specific procedures performed to address it are described below: Revenue recognition (topside journals posted to revenue): Using our analytics tools we performed an analysis over the top topside journals posted to revenue near to year end and obtained the rationale and corroborative evidence for such journals. — Deloitte", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0f1e-7015-9033-108a4ba9aa95", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.86, "x": 0.07, "y": 0.45 }, "kind": "table", "text": "Updated Claw back Policy April 22, 2021: In addition, with respect to Incentive Compensation granted on or after April 1, 2021, in the event that a Covered Employee engaged in Misconduct, whether or not there is a Restatement, the Board may require, after recommendation from the Committee and to the full extent permitted by law, the reimbursement of all or a portion of any such Incentive Compensation paid to, granted to or acquired by the Covered Employee (the \"Recoupment Amount\").", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5d8172f4-99af-40bb-bf54-6061b2ea49fb", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.86, "x": 0.07, "y": 0.33 }, "kind": "table", "text": "Audit Chair Tony Mati: Having become the Audit Chairman in 2012, the recent 2022 proxy statement says Mr. Mati will not be standing for re-election at the Meeting.", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "777ef08d-cca6-4e82-9d93-7170283d5822", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.14, "w": 0.86, "x": 0.07, "y": 0.81 }, "kind": "table", "text": "Deloitte Note On Dairy Crest Financials Thorough March 31, 2021: As a result of performing the above, we identified the greatest potential for fraud in the following area, and our specific procedures performed to address it are described below: Revenue recognition (topside journals posted to revenue): Using our analytics tools we performed an analysis over the top topside journals posted to revenue near to year end and obtained the rationale and corroborative evidence for such journals.", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8cc66ded-1b9a-4932-8967-30b331e31107", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.86, "x": 0.07, "y": 0.62 }, "kind": "table", "text": "Auditor Change From Deloitte To KPMG April 23, 2021: At the annual general meeting of shareholders scheduled on August 5, 2021, the Board of Directors will propose that KPMG LLP, and not Deloitte LLP, be appointed by the shareholders as auditors of the Company for the fiscal year ending March 31, 2022.", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bf0ebf12-c5a8-410e-b4df-2f0411a30efe", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.55, "x": 0.31, "y": 0.04 }, "kind": "title", "text": "Other Potential Signs of Problems At Saputo", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e49515c0-97c2-4f97-81d9-a79a36351f43", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "cc93f5b7-1a91-488c-a70b-a1b214f8188b", "evidence": "The slide explicitly lists red flags related to auditor warnings and governance changes to signal potential financial misconduct.", "confidence": 0.9 } ], "arcBeats": [], "loops": [ { "to": 20, "from": 10, "name": "Pattern Hunter", "slug": "02-pattern-hunter", "bestFor": "Time-pressed audiences, building consensus, when data is strong", "matchId": "93e070f4-3cdf-4432-8956-3f6c6b8e9f3d", "evidence": "The document presents a detailed analysis of Saputo's financial performance, highlighting specific examples of declining performance and flawed management decisions.", "position": 0, "objective": "To identify patterns in Saputo's financial performance and management decisions that indicate a flawed growth strategy.", "structure": "Evidence A -> Evidence B -> Evidence C -> Pattern/Conclusion", "confidence": 0.7, 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