Virtual Global Education reported a net profit of ₹7.01 lakh for the quarter ended June 30, 2026, but audit qualifications regarding financial irregularities and undocumented expenses reverse this to a loss of ₹79.73 lakh. The company's total income from operations stood at ₹26.05 lakh for the quarter, compared to ₹19.54 lakh in the corresponding period of the previous year. However, a qualified opinion from the statutory auditor, Asha & Associates, necessitates adjustments that significantly alter the financial position, raising concerns about internal controls and the reliability of financial reporting.

The auditor identified that the company failed to record an impairment and provision of ₹88,17,931 for funds misappropriated by the former Chief Financial Officer & Director, Mr. Ankit Sharma. A special audit on May 28, 2025, determined this amount was lost through fictitious payments and unauthorized transfers during the financial years 2024-25. Although the company filed a complaint (Complaint no. 801012509075 dated 13.02.2025), the amount remains unrecovered, and no provision was made in the financial statements.

Documentation and Compliance Gaps

The auditor raised further concerns regarding the lack of sufficient documentation for significant financial transactions. The management failed to provide proper documents supporting an advance of ₹5,32,20,571 given for the purchase of land in Gurugram up to June 30, 2026. Additionally, the company could not provide the nature of advances or supporting documentation for loan & advances amounting to ₹21,44,00,000.

Another area of concern was the payment of ₹6,37,09,996 against training expenses payable, for which no supporting documents were provided. The auditor also noted that the company had received ₹10,68,75,000 as the balance 75% of the warrant issue price, but there was insufficient evidence to verify that these funds were utilized as per the purpose approved by SEBI.

Financial Impact of Qualifications

The management stated it is in the process of collating documents and initiating legal recovery proceedings. However, the auditor emphasized that until the financial effects of the fraud and other irregularities are fully accounted for, the financial statements do not present a true and fair view.

Virtual Global Education disclosed audit qualifications for the financial year ended March 31, 2026, citing fraudulent activities by its former CFO and insufficient documentation for significant advances and expenses. The auditors identified a misappropriation of ₹88,17,931 and noted that the financial statements do not present a true and fair view until these issues are resolved. The company reported a net loss of ₹33.89 lakh for the standalone results for the year ended March 31, 2026, compared to a loss of ₹38.33 lakh in the previous year.

Audit Qualifications and Financial Impact

The statutory auditor, Asha & Associates, highlighted that the former Chief Financial Officer (CFO) and Director, Mr. Ankit Sharma, carried out fraudulent activities involving unauthorized transactions and misappropriation of funds. A special audit determined that ₹88,17,931 was misappropriated during the financial years 2024-25 through fictitious payments and unsupported expenses. The company has filed a complaint (Complaint no. 801012509075 dated 13.02.2025) but has not recovered the amount or made a provision for the loss. Consequently, the financial statements require an impairment and provision of ₹88,17,931.

Standalone Financial Results (In ₹ lakhs)

Lack of Documentation for Advances and Expenses

The auditors raised concerns regarding the company's inability to provide documentation for several significant transactions. An advance of ₹5,32,20,571 given for the purchase of land in Gurugram lacked proper supporting documents. Additionally, the company provided loans and advances totaling ₹20,19,00,000 without disclosing the nature of the advances or providing necessary documentation. The auditors stated they could not determine if these transactions were recorded appropriately due to the absence of sufficient audit evidence.

Furthermore, the company paid ₹6,34,88,996 against training expenses payable without offering adequate documentary evidence or satisfactory explanations. The management acknowledged these issues and stated it would take steps to comply and provide the necessary information.

Warrant Allotment and Auditor Comments

The report also noted that the company allotted 14,25,00,000 fully convertible warrants of ₹1 each on a preferential basis to non-promoters following a shareholder resolution on September 10, 2024. While 25% of the warrant issue price was received in the previous year and the balance 75% was received during the current year, the auditors found insufficient evidence to verify that the funds were utilized as per the SEBI-approved purpose. The management is currently collating the required documents to address this qualification.

Board Appointments and Committee Reconstitution

The Board of Directors, at its meeting held on May 27, 2026, approved the audited financial results and appointed new directors. Mr. Prem Gupta was appointed as Whole-Time Director, while Mrs. Payal Sharma and Mr. Rohan Agarwal were appointed as Non-Executive Independent Directors. The Board also reconstituted the Audit Committee, Nomination & Remuneration Committee, and Stakeholders Relationship Committee with the new members. M/s Chandni Singla & Associates were appointed as Internal Auditor for FY 2026-27.

Newspaper Publication

In compliance with Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company published the audited standalone and consolidated financial results for the quarter and year ended March 31, 2026, in the Financial Express (English) and Jansatta (Hindi) on May 28, 2026.