Arihants Securities Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

Arihants Securities' audit record is clean on its face: seven consecutive years of unqualified statutory and secretarial opinions, no subsidiaries or related-party loans, and no regulator orders beyond a settled BSE penalty. But the cash story is the opposite of the profit story, operating cash flow has been negative in four of the last five years while profits were positive, and the governance pattern shows a family holding every key post, three auditor changes in four years, and compliance declarations filed under the wrong company name.

Key findings

  1. Operating cash flow negative against positive profit for four years Major - Net cash from operations was negative in FY2026 at ₹-0.12 crore, FY2025 at ₹-0.14 crore, FY2024 at ₹-0.59 crore, and FY2022 at ₹-0.17 crore, while PAT was positive in each of those years at ₹0.23 crore, ₹0.49 crore, ₹1.04 crore, and ₹1.15 crore respectively. The CFO/PAT ratio was negative in each of those years, from -0.15x to -0.57x. No dividend was recommended for FY2020-21, with profit retained for growth and development.
  2. Revenue is recognised on a cash basis for share trading while receivables days stretch to 395 Major - Revenue from purchase and sale of shares in the Share Segment is recorded on cash basis, per the FY2019-20 annual report. Revenue declined from ₹0.27 crore in FY25 to ₹0.22 crore in FY26, while operating margin worsened from -137% to -175%. Trade receivables days stretched from 109 days in FY25 to 395 days in FY26.
  3. Promoter family holds all key management positions, with no director remuneration and compliance declarations filed under the wrong company name Major - Mrs. Aarisha (Managing Director), Mrs. Rajshri Choudhary (CFO & KMP), and Mr. Nishikant Mohanlal Choudhary (Director) are inter-related, with the relationship disclosed in FY2025-26. The company paid no remuneration to any Non-Executive Directors or Executive Directors in FY2025-26, and no sitting fees were paid to any Director. Compliance declarations dated 02.09.2023, 27.08.2022, and 14.08.2021 each affirmed compliance with the "Galada Finance Limited Code of Conduct", not Arihants Securities Limited, for the respective years ended March 31.
  4. Three statutory auditor changes in four years, with the latest appointment running to 2030 Major - Statutory auditor Mr. K. Nandhiswaran resigned effective 23rd September 2022 "due to preoccupation and health issues". M/s. Varadarajan & Co. was appointed for 5 years from the 2022 AGM, then "tendered resignation on conclusion of the forthcoming AGM due to 'other professional reasons'". M/s. N.R. Krishnamoorthy & Co. was appointed at the AGM held 27th September 2024 with 99.947% votes in favour, holding office till the 35th AGM in calendar year 2030.
  5. Deferred tax assets recognised only under "virtual certainty" while operating losses persist Minor - Deferred tax assets consisting of unabsorbed depreciation and carry-forward losses are recognized only to the extent of virtual certainty of sufficient future taxable income, stated consistently across six annual reports from FY2020-21 to FY2025-26. For FY2025-26, the company reported net profit of Rs. 23.26 lakhs with an OCI loss on valuation of shares of 1.59 crore. The company owns no fixed assets as at 31 March 2026 and 31 March 2025, and no depreciation was provided in either year.
  6. Seven consecutive years of unqualified audit opinions, with one audit-trail exception remediated Minor - The independent auditor issued an unqualified opinion on the standalone Ind AS financial statements for FY2025-26, with no Emphasis of Matter, material-uncertainty paragraphs, or Key Audit Matters reported. The FY2023-24 auditor's report contained an audit trail exception stating the accounting software lacked the facility, but the FY2024-25 and FY2025-26 reports each confirmed the facility exists. CARO clause 3(xvii) for FY2025-26 reported cash losses of Rs.12.02 Lakhs during the year and Rs.14.38 Lakhs in the preceding year, whereas the same clause reported no cash losses in each of the prior four years.
  7. No pending litigations impacting financial position reported, while one income tax demand remains disclosed Minor - The FY2025-26 standalone auditor's report states under Rule 11(i) that the company has no pending litigations which would impact its financial position. As of 31.03.2020, the company disclosed a contingent liability of an Income Tax Demand for AY 2012-13 of ₹19,17,040, with appeal filing pending due to COVID-19 lockdown. For the year ended 31 Mar 2025, the company continued to disclose the same contingent liability as pending appeal.
  8. No material regulator orders or penalties disclosed across seven years, with one minor BSE penalty Minor - The company disclosed in each annual report from FY2019-20 through FY2025-26 that no significant and material orders were passed by regulators or courts impacting going concern status or future operations. A penalty of ₹1,08,560 was paid to Bombay Stock Exchange for non-appointment of Company Secretary, included in Rates & Taxes in FY2019-20. The company stated in its FY2025-26 and FY2024-25 corporate governance reports that no penalties or strictures were imposed by Stock Exchanges, SEBI or any statutory authority on capital market matters during the last three years.
  9. No related-party loans, investments, or guarantees for six consecutive years Clean - Arihants Securities Ltd reported no loans given, no investments made, and no guarantee/security provided under Section 186(4) in each of FY2019-20, FY2020-21, FY2021-22, FY2022-23, FY2023-24, and FY2025-26. All related party transactions were reported at arm's length in ordinary course of business with no AOC-2 disclosure required in each of those years. For FY2019-20, the only disclosed related party transactions were purchases of ₹75,64,631.00 and sales of ₹3,70,666.00 with ASL Capital Holdings Private Limited (common director), stated to be at arm's length.
  10. No subsidiaries, associates, or joint ventures across all six years examined Clean - The company reported having no subsidiary, joint venture or associate in each of FY2025-26, FY2024-25, FY2023-24, and FY2022-23, with Section 129(3) consolidated financial statements not applicable. CARO clause xxi in FY2025-26 confirms the company has no subsidiaries, associates and joint ventures. CARO clause 3(xvi) in FY2021-22 confirms the company is registered under Section 45-IA of RBI Act, 1934 as Non-Banking Financial Company, with no core investment company within the Group.

What to watch

Bottom line: This is a disclosed and audited record with a simple corporate structure and clean audit opinions. The risk sits in the gap between reported profit and cash: four years of negative operating cash flow against positive PAT, with receivables days stretching to 395, raises the question of what the profit actually represents. Watch whether the cash losses persist, whether the compliance declarations get the company's own name on them, and whether the new auditor completes its term.