Chartered Capital & Investment Ltd has reported nine consecutive years of clean audit opinions, yet the cash story underneath is the opposite of the profit story: cumulative operating cash flow of ₹-45 crore against ₹15 crore of reported profit. The record also carries an escalating regulatory trail, a 2022 SEBI settlement, a 2024 warning letter, and a 2026 surrender of the merchant banking licence, alongside recurring gaps between what the board discloses about related parties and what the auditor reports.
Key findings
- Nine years of negative operating cash flow against reported profits
Major- Cumulative operating cash flow was ₹-45 crore against cumulative profit of ₹15 crore and other income of ₹12 crore over nine years, a ratio of -11.92x. CFO was negative in each of the last five fiscal years, from ₹-0.85 crore in FY22 to ₹-12.50 crore in FY26, while profit was positive in four of those five years. The auditor F P & Associates issued unqualified opinions throughout, with no Key Audit Matters in any year and no Emphasis of Matter paragraphs since FY2021-22. - Profits lean on fair-value gains from a volatile investment book
Major- Profit rose from ₹32.67 lacs in FY23 to ₹543.33 lacs in FY24, attributed to gains on sale of investments and on mutual funds measured at fair value. The equity portfolio at FVTOCI fell \~71% from ₹113.71 crore to ₹33.17 crore in FY24, while mutual fund holdings rose \~57x to ₹98.16 crore. Other income made up 30.7% of pre-tax profit in the latest period. - SEBI escalation from settlement to warning to licence surrender
Major- SEBI issued a Show Cause Notice in December 2021 over the company's role in Mazda Limited's buyback; the matter was settled in July 2022 for ₹10,87,500 without admission or denial. A March 2024 SEBI warning letter cited violations of Merchant Bankers and PIT regulations, advising the company to "improve the compliance standards". The company surrendered its merchant banking registration in April 2026, accepted by SEBI on June 1, 2026. - Board reports say no related-party deals; CARO reports show loans to companies
Major- The FY2023-24 CARO report states the company "granted unsecured loans to one company" with loans "overdue for more than 90 days," while the same year's Board report says "no related party transactions during the year except remuneration paid to Directors". The FY2022-23 CARO report notes a loan that "fell due during the year and was renewed/extended," against the same board disclosure. In FY2025-26, CARO states no loans were granted to promoters or related parties. - "Low debt" narrative masks a one-year swing to net debt
Major- Short-term borrowings rose from ₹36.70 lakh in FY2021 to 7.56 crore in FY2022, while cash fell from 3.26 crore to nil, flipping the company from net cash of 2.89 crore to net debt of 7.56 crore in a single year. The company has described itself as having "low debt" in filings from FY2020 through FY2026. CARO reports confirm no repayment defaults and no wilful-defaulter declaration across FY2023-26. - Revenue is volatile and leans on trading income, not core fees
Major- Revenue from professional fees and trading fell from ₹47.07 lacs in FY21 to ₹19.99 lacs in FY22, attributed to a "substantial reduction in professional fees". Total income fell from ₹215.97 lacs to ₹168.15 lacs in the same year, swinging profit from ₹45.06 lacs to a loss of ₹2.16 lacs. The company makes no provision for expected credit loss on receivables, stating historical losses are not material. - Promoter family holds 74.37%; MD's pay frozen for seven years
Minor- The Managing Director and his wife together hold 74.37% of the company. Mr. Mohib N Khericha's remuneration has been fixed at ₹18,21,600 annually for seven consecutive years, with no performance-linked pay in any year. The Company Secretary was paid ₹19.98 lacs in FY2023, exceeding the MD's ₹18.22 lacs. - Auditor fees flat at ₹1,00,000 for three years; same firm since FY2020
Minor- Auditor fees were ₹1,00,000 in each of FY2024, FY2025 and FY2026, up from ₹25,000 in the prior four years. F P & Associates was re-appointed in September 2022 for a second five-year term running to 2027. A September 2023 newspaper advertisement named a different firm, K. A. Pandhi & Co., as statutory auditor. - No subsidiaries, associates, or Core Investment Company status
Clean- The company has consistently reported no subsidiary or associate in every annual report from FY2021 through FY2026. CARO reports confirm no subsidiaries, joint ventures or associates, and state the company is not a Core Investment Company and is exempt from RBI registration.
What to watch
- MD re-appointment vote. Shareholders vote at the 40th AGM on re-appointing Mr. Khericha for three years from April 1, 2027, following Board approval on August 10, 2026.
- SEBI follow-up. Whether SEBI takes further action after accepting the merchant banking surrender on June 1, 2026.
- Minimum-remuneration trigger. Whether the clause activates in any year of Mr. Khericha's term from April 1, 2027, given the company's acknowledgment of possible "loss or inadequate profit".
- FY2026-27 cash flow. Whether CFO remains negative while PAT is positive, and whether dividends stay forgone.
- Senior management pay. Whether Mr. Sagir Khericha and Mr. Sagar Bhatt, appointed March 1, 2026, receive remuneration exceeding the MD's fixed ₹18,21,600.
Bottom line: This is a disclosed and audited record with a clean structural profile, no subsidiaries, no defaults, no wilful-defaulter status. The risk sits in the gap between the reported profit and the cash it never generates, and in a regulatory history that has escalated rather than closed. Read the profit line as an investment-portfolio story, not an operating one, and watch the FY2026-27 cash flow and the MD re-appointment vote.