MahaRashtra Apex Corporation Reports Q2 FY2026 Results with Auditor Qualifications on Interest Provisions

Maha Rashtra Apex Corporation Limited (MACL) has released its unaudited financial results for the quarter and half-year ended September 30, 2025, revealing a complex financial situation with auditor qualifications on interest provisions and ongoing regulatory challenges.

Key Financial Highlights

The company's financial results were accompanied by qualified opinions from auditors on both standalone and consolidated statements. The primary concern raised by the auditors was the non-provision of delayed period interest costs on deposits.

Particulars	Amount (Rs. in lakhs)
Unprovided Interest (Q2 FY2026)	12.21
Unprovided Interest (H1 FY2026)	23.95
Cumulative Unprovided Interest (Oct 2019 - Sep 2025)	357.71

According to the auditors, this non-provision has resulted in overstated profits and understated liabilities.

Auditor Qualifications and Emphasis of Matter

The auditors highlighted several critical points in their report:

Deposit Repayment Scheme: As per a scheme sanctioned by the Karnataka High Court in October 2004, all deposits and bonds were to be repaid by June/September 2009. However, the total principal and accrued interest payable to the public remains outstanding at Rs. 1,367.81 lakhs.
Court Deposit: During the financial year 2023-24, MACL deposited Rs. 1,395.75 lakhs with the Karnataka High Court.
RBI Registration Cancellation: The Reserve Bank of India (RBI) cancelled MACL's Certificate of Registration to act as a Non-Banking Financial Company on June 13, 2002.
Property Sale Agreement: The company entered into a sale agreement with Kanara Consumer Products Ltd. (formerly Kurlon Limited) for a property. As of September 30, 2025, the total amount credited under this agreement is Rs. 1,273.37 lakhs, though the stipulated time in the agreement has lapsed.

Financial Position

The standalone balance sheet as of September 30, 2025, shows:

Particulars	Amount (Rs. in lakhs)
Total Assets	52,055.00
Total Equity	44,920.00
Current Liabilities	29,135.00

Cash Flow

The standalone cash flow statement for the half-year ended September 30, 2025, indicates:

Particulars	Amount (Rs. in lakhs)
Net cash flow from operating activities	(148.70)
Net cash flow from investing activities	137.51
Net increase in cash and cash equivalents	(11.19)

Consolidated Results

On a consolidated basis, the company reported:

Particulars	Amount (Rs. in lakhs)
Total Assets	53,620.32
Total Equity	44,508.84
Net cash flow from operating activities	(147.50)
Net cash flow from investing activities	135.30

Outlook and Challenges

Maha Rashtra Apex Corporation Limited faces significant challenges, including the need to address the auditor's qualifications regarding interest provisions and the ongoing implications of its cancelled NBFC registration. The company's ability to resolve these issues and improve its financial position will be crucial for its future operations and compliance with regulatory requirements.

Investors and stakeholders should closely monitor the company's progress in addressing these concerns and its efforts to fulfill its financial obligations as per the court-sanctioned scheme.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.82%	-0.84%	-6.92%	-19.59%	-38.00%	+32.76%

Maha Rashtra Apex Corporation Limited (MRACL) has reported a substantial increase in profits for the first quarter of the fiscal year 2025-26, alongside several important board decisions, as per the company's recent regulatory filing.

Financial Performance

The company's unaudited standalone financial results for Q1 FY2026 (ended June 30, 2025) show a remarkable turnaround:

Particulars (Standalone)	Q1 FY2026	Q1 FY2025	Change
Profit After Tax	₹597.18	₹(11.05)	↑ 5,504%
Total Income	₹29.77	₹22.13	↑ 34.5%
Total Expenses	₹31.01	₹46.87	↓ 33.8%

On a consolidated basis, the company's performance was even more impressive:

Particulars (Consolidated)	Q1 FY2026	Q1 FY2025	Change
Profit After Tax	₹2,240.34	₹26.39	↑ 8,389%
Total Income	₹53.45	₹79.01	↓ 32.3%
Total Expenses	₹59.04	₹104.25	↓ 43.4%

The substantial increase in profit is primarily attributed to exceptional items and the company's share of profit from associates.

Key Board Decisions

Internal Auditor Re-appointment: Ms. Nita J. Desai has been re-appointed as the Internal Auditor for FY 2025-26. Ms. Desai, a Chartered Accountant with over 23 years of experience, has been serving as the company's Internal Auditor.
New Independent Director: Mr. Nagarajan Sivaramakrishnan (DIN: 03060429) has been appointed as a Non-Executive Independent Director, effective August 13, 2025, subject to shareholder approval. Mr. Sivaramakrishnan brings over 25 years of experience in the private sector, including leadership roles in major consumer companies.
Corporate Office Relocation: The Board has approved shifting the Corporate Office from Syndicate House, Manipal to new premises at Chitrakala, Manipal - 576104. This move is aimed at better accommodating current and future operational requirements.

Auditor's Observations

The company's auditors, H G Sarvaiya and Co., have issued a qualified opinion on the financial results. They noted that MRACL has not provided for delayed period interest cost on deposits amounting to ₹11.75 lakhs for the quarter, with a cumulative unprovided interest of ₹345.50 lakhs from October 2019 to June 2025.

Regulatory Compliance

It's worth noting that the Reserve Bank of India (RBI) had cancelled MRACL's Certificate of Registration to act as a Non-Banking Financial Company on June 13, 2002. Additionally, as per a scheme sanctioned by the Hon'ble High Court of Karnataka, all deposits/bonds were to be repaid by June 15, 2009 / September 15, 2009. The outstanding principal and accrued interest payable to the public amounts to ₹1,367.81 lakhs. In FY 2023-24, the company deposited ₹1,395.75 lakhs with the Hon'ble High Court of Karnataka.

The financial results and board decisions were approved at a Board meeting held on August 13, 2025, which commenced at 11:00 a.m. and concluded at 3:30 p.m.

Investors and stakeholders should note that while the company has shown significant profit growth, the auditor's qualifications and ongoing regulatory matters should be considered when evaluating the company's overall financial position and future prospects.