Manraj Housing Finance Limited reported a net loss of ₹47.97 lakh for the financial year ended March 31, 2026, a significant reversal from the net profit of ₹33.64 lakh recorded in the previous year. The company’s total income for FY26 stood at ₹4.29 lakh, a sharp decline from ₹54.29 lakh in FY25, while total expenses increased to ₹52.26 lakh from ₹20.65 lakh in the prior year. The statutory auditors, M/s Ratan Chandak & Co LLP, issued an adverse opinion on the financial statements, citing material uncertainties regarding the recoverability of assets and the company's ability to continue as a going concern.

Financial Performance

The company’s financial results for the quarter and year ended March 31, 2026, were approved by the Board of Directors on May 25, 2026. Revenue from operations remained nil for both the quarter and the year, with income solely derived from other sources. Expenses were driven by employee benefits, finance costs, and other expenses, which collectively outweighed the total income. The basic and diluted earnings per share (EPS) for FY26 stood at -₹0.96, compared to ₹0.67 in the previous year.

Auditor’s Adverse Opinion

M/s Ratan Chandak & Co LLP, Statutory Auditors, issued an adverse opinion, stating that the financial statements do not present a fair view due to material and pervasive matters. The auditors highlighted that more than 99% of the company's assets comprise advances to related parties, which are currently under investigation by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA). The attachment of these assets by the ED raises significant concerns about their recoverability and valuation.

Additionally, approximately 65% of the company's liabilities consist of unsecured loans from related parties, creating uncertainty about the completeness and accuracy of the liabilities. The auditors also noted a default in the repayment of bank borrowings amounting to ₹687.03 lakh, which has been transferred to ASREC (India) Ltd. The company has not provided for uncharged interest and penal interest amounting to ₹711.42 lakh, leading to an understatement of losses and liabilities.

Going Concern and Internal Controls

The auditors expressed significant doubt regarding the company's ability to continue as a going concern. Manraj Housing Finance has not carried out significant operational activities for over three years and has accumulated losses of ₹574.96 lakh, eroding its net worth. The adverse opinion extends to the company's internal financial controls over financial reporting, which were found to be inadequate and ineffective due to material weaknesses, including the non-implementation of the audit trail feature in accounting software.

Management Response

In the Statement on Impact of Audit Qualifications, management acknowledged the investigation by the ED and the attachment of properties but stated that the companies under investigation share only common management with Manraj Housing Finance. Regarding the bank default, management mentioned a revoked one-time settlement with ASREC (India) Ltd. and expressed confidence in resolving the matter through a renewed settlement once legal proceedings stabilize. The company holds significant real estate assets and expects to restore positive net worth upon liquidation post-resolution of impediments.

Manraj Housing Finance Ltd reported a net loss of ₹47.97 crore for the financial year ended March 31, 2026, a sharp reversal from the net profit of ₹33.64 crore recorded in the previous year. The company’s revenue from operations was nil for both the quarter and the year, while total income stood at ₹4.29 crore, driven solely by other income. Total expenses for the year increased to ₹52.26 crore from ₹20.65 crore in the prior year, resulting in a negative net worth of ₹74.96 crore.

The Board of Directors approved the audited financial results for the quarter and year ended March 31, 2026, at a meeting held on May 26, 2026. The audit report was submitted by M/s Ratan Chandak & Co LLP, Statutory Auditors of the company. The Board did not recommend any dividend for the period.

Auditor's Adverse Opinion

M/s Ratan Chandak & Co LLP issued an adverse conclusion on the financial statements, citing significant material misstatements and uncertainties. The auditors identified that more than 99% of the company's assets comprise advances and receivables from related parties who are currently under investigation by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA). The attachment of these assets by the ED raises serious concerns about their recoverability and valuation.

Additionally, approximately 65% of the company's liabilities consist of unsecured loans from related parties. The auditors noted that the entanglement of these transactions creates significant uncertainty regarding the completeness and accuracy of the liabilities.

Default and Going Concern Risks

The company has defaulted on repayments to Jalgaon Peoples Co-Op. Bank Ltd., with an outstanding amount of ₹687.03 lakhs as of February 2020. The debt has been transferred to ASREC (India) Ltd., an Asset Reconstruction Company. The auditors highlighted that the company has not provided for uncharged interest amounting to ₹442.75 lakhs for the period from March 1, 2020, to March 31, 2024, and an additional ₹268.67 lakhs for the period from April 1, 2024, to March 31, 2026. Consequently, the loss for the year is understated by ₹141.94 lakhs, and liabilities are understated by ₹711.42 lakhs.

The auditors stated that the company has not been in operation for more than three years, has a negative net worth, and has defaulted on bank borrowings. These factors indicate severe financial distress and raise substantial doubt about the company's ability to continue as a going concern.

Financial Summary