MPF Systems Ltd entered the Corporate Insolvency Resolution Process after defaulting on a ₹1 crore loan, and admitted claims in the CIRP totalled ₹23.50 crore, of which 92.46% were government dues. The company has since exited CIRP under an approved resolution plan, but legacy customs demands of ₹23,34,007 and disputed income tax demands of ₹1,50,000 each for six assessment years remain unresolved, and going-concern warnings have appeared in every audit report from FY2019-20 through FY2024-25.
Key findings
- The company entered CIRP after defaulting on a ₹1 crore loan, with ₹23.50 crore in admitted claims
Critical- MPF Systems Ltd defaulted on a ₹1,00,00,000 loan dated 30 August 2021 that was repayable by 31 March 2022, and admitted it owed the financial creditor ₹1,10,50,666 as of 31 March 2023. Admitted claims in the CIRP totalled ₹234,991,086 as of 7 August 2024, comprising unsecured financial creditors ₹16,838,173, government dues ₹217,258,660, and other operational creditors ₹879,253. Customs authorities issued notices for ₹23,34,007 plus interest, and disputed income tax demands of ₹1,50,000 each for six assessment years from AY 2018-19 to AY 2023-24 were pending before CIT (Appeals) as of FY2024-25. - The company underwent a complete CIRP from November 2023 to March 2025, and SEBI imposed a ₹10,00,000 penalty that remains under appeal
Major- NCLT Mumbai Bench admitted CIRP on 8 November 2023 on a petition by financial creditor Rover Finance Limited, and Mr. Raghunath S. Bhandari was appointed Interim Resolution Professional. NCLT approved the Resolution Plan submitted by EFC (I) Limited on 15 October 2024, and the CIRP closed on 24 February 2025 after the Monitoring Committee issued a Consummation Certificate on 16 January 2025. SEBI conducted a forensic audit for the period 1 April 2015 to 15 January 2018, and its Adjudicating Officer imposed a penalty of Rs. 6,00,000 on 28 February 2020, later increased to Rs. 10,00,000 by an order dated 22 December 2020, against which the company has filed an appeal before the Securities Appellate Tribunal. - Going-concern warnings persisted across six years, and audit-trail exceptions at the database layer were reported in two successive years
Major- The auditor's report for every year from FY2019-20 through FY2024-25 contained an Emphasis of Matter or Disclaimer of Opinion citing net-worth erosion, accumulated losses, and material uncertainty about the company's ability to continue as a going concern. The auditor reported that the audit-trail feature was not enabled at the database layer to log direct data changes for the accounting software in both FY2024-25 and FY2025-26. The CARO report for FY2025-26 also stated that advances paid to suppliers remained unconfirmed and that the company had not provided bifurcation between MSME and non-MSME creditors. - The company carried an inter-corporate loan of ₹1.21-1.22 crore while repeatedly disclaiming loans under Section 186, and an auditor emphasis-of-matter flags a ₹2.61 crore third-party funding arrangement
Major- MPF Systems Ltd reported an inter-corporate loan of ₹1.21 crore as at 31 March 2023 and ₹1.22 crore as at 31 March 2024 in its audited financial results. The Board's Report for FY2022-23 states the company had no loans covered under Section 186 of the Companies Act, 2013, while the financial statements for the same year disclose a loan taken from Minaxi Suppliers Pvt Ltd of ₹10.51 lakhs and a loan repaid to Royal Nirman Pvt Ltd of ₹35.00 lakhs in the prior year. The auditor's report for FY2024-25 contains an Emphasis of Matter noting a declaration from Onix Renewable Limited that it will make the entire payment of ₹2,60,50,000 on behalf of nominees, and that its director Mr. Divyeshkumar Mansukhlal Savaliya is one of the promoter subscribers. - Board and KMP positions show rapid turnover, with the new Managing Director being the brother of the Executive Director
Major- Mr. Parshottambhai Premjibhai Rupareliya was appointed Managing Director for 5 years from 20th June 2026 and is the brother of Executive Director Mr. Kurjibhai Premjibhai Rupareliya. Mr. Sharang Amar Sharma was appointed Managing Director on 13th January 2026 and resigned on 20th June 2026, serving approximately 5 months. Ms. Drashti Harshadbhai Delvadiya was appointed CFO on 11th April 2025 and resigned on 28th February 2026, serving approximately 10.5 months. At the FY2025-26 AGM, all four resolutions received 555,712 votes in favour with zero votes against. - The statutory auditor resigned mid-term in November 2024 and the secretarial auditor resigned in May 2026
Major- Statutory auditor M/s PAMS & Associates resigned effective 29 November 2024, citing the company's approved resolution plan as the context for the casual vacancy. M/s S K Bhavsar & Co. was appointed on the same date to fill the vacancy, with a term only until the conclusion of the ensuing AGM. Secretarial Auditor Ms. Krina Gokulkumar Shah, appointed for a five-year term from FY2025-26, resigned effective 18 May 2026 due to personal reasons. - Revenue collapsed from 1,080 crore in FY20 to near-zero by FY23, with receivables days already stretched to 145 days in FY20
Major- Revenue declined 18% to 1,080 crore in FY20 from 1,310 crore in FY19, which management attributed to COVID-19 disruptions and project deferrals. Trade receivables days outstanding increased to 145 days in FY20 from 112 days in FY19. Income from operations fell to Rs. 1,20,000/- in FY2022-23, and revenue was reported at ₹0.07 crore in FY24 and ₹0.00 crore in FY25, before rising to ₹4.45 crore in FY26. - Operating cash flow has persistently lagged reported profits, and no dividend has been paid in any recent year
Minor- Cumulative CFO over the nine years through FY2026 was negative ₹1 crore against cumulative PAT of ₹1 crore, yielding a cumulative CFO/(PAT−other income) ratio of -1.23x. In FY2026, CFO was ₹2.34 crore against PAT of ₹3.83 crore, a CFO/PAT ratio of 0.61x. The company did not recommend any dividend for FY2022-23, FY2023-24, or FY2024-25.
What to watch
- SEBI penalty appeal. The company's appeal before the Securities Appellate Tribunal against the SEBI order dated 22 December 2020 imposing a penalty of Rs. 10,00,000 is pending.
- Income tax appeals. Disputed income tax demands of ₹1,50,000 each for AY 2018-19 to AY 2023-24 were pending before CIT (Appeals) as of FY2024-25.
- Customs demands and bank freeze. Customs demands of ₹23,34,007 plus interest remain unresolved, and a related bank account freeze was in effect as of 31 March 2021.
- Supplier advances and MSME classification. Confirmation of supplier advances and MSME creditor classification, both flagged as Emphasis of Matter in the FY2025-26 audit report, are to be addressed in the next reporting period.
Bottom line: This is a company that has been through an insolvency resolution, shed its legacy operating business, and emerged with a new promoter and a fresh board. The record carries the weight of that journey: six years of going-concern warnings, unresolved government dues, and a pattern of auditor and director churn that predates and outlasts the CIRP. The new management has begun reporting revenue again, but the audit-trail gaps, unconfirmed supplier advances, and the ₹2.61 crore third-party funding arrangement flagged by the auditor mean the post-CIRP control environment is still taking shape. Watch whether the customs and tax appeals reach closure and whether the new board stabilises beyond its first year.