Alan Scott Enterprises Ltd Forensic Report - SOIC x StockScans Report

as of Sep 2026

Alan Scott Enterprises' record shows a company in transition: revenue has grown sharply, but that growth has not yet produced cash. The company has reported cash losses in four of the last five years, and its consolidated financial statements carry a qualified audit remark for two consecutive years. The most significant issues centre on a web of promoter-linked subsidiaries, a narrow definition of debt, and a board that has repeatedly failed statutory composition rules.

Key findings

  1. Parent funds promoter-linked subsidiaries via loans and investments; Section 186 limit doubled to ₹50 crore Major - Loans given by Alan Scott Enterprises Ltd during FY2025-26 were ₹2.50 crore, up from ₹2.63 crore in FY2024-25, to subsidiaries including Alan Scott Automation and Robotics Ltd and Alan Scott Envirotech Limited, all unsecured and repayable on demand. Investments made during FY2025-26 were ₹18.59 crore, a \~3.5x increase from ₹5.24 crore in FY2024-25. Consolidated PAT was ₹-4.79 crore versus standalone PAT of ₹0.14 crore in the latest year, meaning 103% of the consolidated loss was attributable to subsidiaries. The Board of Directors at a meeting held on August 27, 2026 approved enhancement of the Section 186 limit for investments, loans, guarantees and securities from ₹25 crore to ₹50 crore. The FY2024-25 Board's Report states no loans, guarantees, or securities were provided under Section 186 during the year, contradicting the standalone financial statements which disclose Section 186(4) loans of ₹2.63 crore for FY2024-25.
  2. The company defines "debt" narrowly as only long-term liabilities while its subsidiary carries bank borrowings secured by a corporate guarantee, and it is now seeking to double its borrowing powers to ₹50 crore Major - Alan Scott Enterprises Ltd's debt-equity ratio disclosures define debt as "only Long Term Liabilities," excluding short-term borrowings and other obligations from the metric. Subsidiary Alan Scott Retail Ltd availed credit facilities from Axis Bank Ltd aggregating ₹4.37 crores, with charges filed with ROC within stipulated time. Alan Scott Enterprises Ltd gave a Corporate Guarantee to Axis Bank Ltd in respect of Subsidiary Alan Scott Retail Limited to the extent of Loan ₹4,37,00,000 during FY2022-23. During the FY2023-24 audit period, the Company had borrowings in excess of limits specified under Section 180(1)(c) of Companies Act, 2013. The AGM notice dated 4 September 2026 proposes increasing borrowing powers under Section 180(1)(c) from ₹25 crore to ₹50 crore.
  3. Audit opinions have been clean since FY2022, but the consolidated CARO report carries a qualified remark on clause (iv) for the holding company in FY2025 and FY2026, and the company has reported cash losses in four of the last five years Major - The consolidated auditor's report for FY2025-26 states the Holding Company's CARO report contains a qualified remark in clause (iv). The consolidated auditor's report for FY2024-25 states a qualified remark exists in clause (iv) of the CARO report for Alan Scott Enterprises Limited (Holding Company). The standalone auditor's report for FY2024-25 was unqualified with no Key Audit Matters reported, issued by Pravin Chandak & Associates dated 28-05-2025. CARO clause (xvii) reported the company incurred cash loss in FY2023-24, in FY2022-23, and in FY2021-22. CARO clause (xvii) reported no cash loss in FY2024-25.
  4. Operating cash flow has been negative every year since FY22 while the company continues to fund working capital and acquisitions through borrowings and rights-issue proceeds, with no dividends paid Major - Cumulative operating cash flow from FY22 through FY26 was negative ₹14 crore against cumulative operating profit of ₹3 crore. Operating cash flow was negative ₹1.58 crore in FY22, negative ₹1.57 crore in FY23, negative ₹3.11 crore in FY24, negative ₹1.68 crore in FY25, and negative ₹6.16 crore in FY26. The company's FY26 interest coverage ratio was -1.2x. The FY2025-26 Annual Report states that the current ratio variance was "due to financing of working capital by short term borrowing availed". On 7 May 2025, the rights issue letter of offer disclosed that net proceeds of ₹6.5 crore are proposed to be utilised towards strategic acquisitions/investments over the financial year ending 31 March 2026.
  5. Revenue scaled from ₹1.24 crore to ₹35.51 crore in five years, but the company has not generated positive operating cash flow in any of those years, and receivables days have compressed sharply as revenue grew Major - Revenue grew from ₹1.24 crore in FY22 to ₹35.51 crore in FY26, while cumulative CFO over the same period was negative ₹14 crore against cumulative operating profit of ₹3 crore. Revenue grew from ₹11.50 crore in FY24 to ₹28.69 crore in FY25 to ₹35.51 crore in FY26, while receivables days fell from 12.90 in FY24 to 7.92 in FY25 to 6.27 in FY26. The Automation & Robotics segment reported revenue of ₹0.66 crore in FY24, ₹4.16 crore in FY25, and ₹2.07 crore in FY26, with PBIT margins of -57.31%, 7.42%, and -131% respectively.
  6. A family-controlled board repeatedly failed statutory composition rules, while the promoter-MD has been re-appointed without remuneration and shareholder votes show near-total promoter dominance Major - Mr. Sureshkumar Jain (DIN: 00048463) was re-appointed as Managing Director for a further five-year term effective June 24, 2026 to June 23, 2031, without any remuneration at present but eligible for remuneration, commission, perquisites and other benefits upon the Company attaining profitability. Mr. Sureshkumar Jain held 3,631,820 shares of Alan Scott Enterprises Limited as disclosed in the FY2025-26 AGM notice, and is the father of Mr. Darshan Suresh Jain and Ms. Saloni Suresh Jain, both of whom serve on the Board. The Secretarial Auditor reported for FY2021-22 that the Company did not have the requisite number of Independent Directors under Section 149(4) from 30/06/2021 till 14/12/2021, and no woman Director under Section 149 from 13/08/2021 till 31/03/2022. In the FY2024-25 AGM scrutinizer's report, Promoter and Promoter Group held 3,638,933 shares and polled 3,638,933 votes (100% of their shares), while Public-Non Institutions held 1,808,657 shares and polled only 94,177 votes (5.21% of their shares); all resolutions received 3,733,110 votes in favour (100%) and 0 against.
  7. Alan Scott's financial statements repeatedly state no provision is made for employee retirement benefits under Ind AS 19, while simultaneously claiming compliance with Ind AS, a contradiction that persists across five consecutive annual reports Major - The FY2025-26 standalone financial statements state "No provision has been made for retirement and employee benefit as per 'Ind AS 19' regarding retirement". The FY2024-25 standalone financial statements state "No provision has been made for retirement and employee benefit as per 'Ind AS 19' regarding retirement". The FY2022-23 consolidated financial statements state they are prepared under Indian GAAP (Accounting Standards under Section 133 of Companies Act, 2013), not Ind AS, despite the notes text referencing Ind AS 103, 109, 108, and 19 in policy text. The FY2021-22 standalone financial statements state they are prepared under Indian GAAP/Accounting Standards under Section 133, not Ind AS, despite notes referencing Ind AS 19, 103, 108, and 109.
  8. Auditor continuity since 2020, with a mid-year resignation by Bhatter & Co. and immediate replacement by Pravin Chandak & Associates, who were later reappointed for a second five-year term Minor - M/s. Bhatter & Co. resigned as statutory auditor on 24 August 2020, and M/s. Pravin Chandak & Associates was appointed as statutory auditor on 8 September 2020, to hold office until the forthcoming AGM. At the AGM held on 29 September 2025, shareholders approved the reappointment of Pravin Chandak & Associates, Chartered Accountants, Mumbai (ICAI Firm Registration Number: 116627W) as statutory auditors for a second term of five consecutive years, with 3,733,110 votes in favour (100%) and 0 against. The FY2024-25 Secretarial Audit Report by KNK & Co LLP (FRN L2018MH002800) contained a qualification that the Company failed to file a couple of e-forms within prescribed due dates under the Companies Act, 2013.

What to watch

Bottom line: This is a record of rapid, loss-making expansion. The company's revenue has grown tenfold, but that growth has been funded by borrowings and related-party loans, and it has not yet generated positive operating cash flow. The risk is concentrated in the promoter group's control over both the company and its subsidiaries, and in the board's own disclosures, which have contradicted the financial statements on key points. Watch the AGM resolutions on the Section 186 and 180 limits, and whether the promised acquisitions and rights-issue spending produce any cash.