Nirav Commercials' record is thin and conflicted. The company sold its only operating business to a promoter-group entity for ₹1.25 crore, and the auditor had earlier flagged missing fixed-asset records for five years and absent audit trails for three. Six years of unqualified audit opinions sit alongside a recurring pattern of missing fixed-asset records and absent audit trails. Profit in the latest year exists only because of the sale gain.
Key findings
- The sole operating business was sold to a promoter group for ₹1.25 crore
Critical- In FY2025-26, Nirav Commercials sold its entire "Elesar Focchi" aluminium undertaking to Hind Aluminium Industries Limited, a group company with common promoters, for a lump-sum slump-sale consideration of ₹1.25 crore. The undertaking contributed 100% of revenue, with income of ₹30.47 crore and net worth of ₹9.73 crore as of 31 March 2025. From FY2020-21 through FY2024-25, the company's AOC-2 filings consistently stated "NOT APPLICABLE" or disclosed no material related-party contracts, despite the existence of related-party loans and the eventual slump sale. - The auditor has flagged missing fixed-asset records for five years and no audit trail for three
Major- The CARO report states the Company does not maintain proper records showing full particulars of Property, Plant and Equipment, and has not physically verified them, in FY2022 through FY2026. The auditor reported the company had not used an accounting software with an audit-trail feature for FY2023-24, FY2024-25, and FY2025-26. The auditor issued a Disclaimer of Opinion on Internal Financial Controls for FY2020-21, stating management's information was "not complete". - Profit in FY26 depends entirely on the sale gain, while lease accounting remains deferred
Major- In FY26, the company reported a net profit of ₹42.55 lakh, which included an exceptional gain of ₹32.93 lakh from the transfer of its division to Hind Aluminium Industries Ltd. The company has not adopted Ind AS 116 "Leases" and states it is still evaluating the impact, a position that has continued since 2019-20. - Operating cash flow has been negative for two years while profit stayed positive
Minor- Net cash from operating activities was negative ₹3.27 crore in FY26 and negative ₹0.28 crore in FY25, while PAT was positive ₹0.43 crore and ₹0.04 crore respectively. The Board did not recommend any dividend for any of the last six years. - A four-member board approved a 167% MD remuneration increase
Minor- The Board has comprised the same four individuals from FY2020-21 through FY2025-26: Lalit Kumar Daga (Chairman), Raghav Daga (Managing Director), and two independent directors. Upon reappointment from June 7, 2024, Raghav Daga's monthly remuneration ceiling was raised to Rs. 10,00,000, an increase of 167% from the prior term. At the 41st AGM on July 31, 2026, the resolution to re-appoint Raghav Daga received 95 votes against from public non-institutional shareholders, representing 79.17% of their votes cast. - Revenue is concentrated in one segment with no bad-debt provisioning
Minor- The company operates in a single reportable segment, manufacturing of Aluminium Doors & Windows, with no separate segments under AS-17. No provision is made for bad and doubtful debts because management considers them not doubtful of recovery. Revenue was ₹12.89 crore in FY26 and ₹9.73 crore in FY25, with operating margins negative in three of the last four years. - Disputed tax demands span over a decade
Minor- The company has disputed customs duty demands of ₹3,44,76,246 for the period 01/11/2004 to 30/04/2008 pending before The Commissioner of Customs (Appeals). A disputed CST Act demand of ₹84,535 for FY 2018-19 is pending before the Assistant VAT Officer, Daman.
What to watch
- MD term expiry. Raghav Daga's current term as Managing Director expires on June 6, 2027; any renewal or remuneration revision would require shareholder approval.
- Customs duty resolution. Disputed customs duty demands of ₹3.45 crore pending before Commissioner of Customs (Appeals), no scheduled date, anchored to the FY2025-26 Annual Report period.
- Receivables pattern. Monitor whether the zero-receivables position at FY26 year-end persists, given the prior pattern of receivables days swinging from 86.92 (FY23) to 36.83 (FY24) to 60.42 (FY25).
Bottom line: This is a disclosed record where the operating business has been sold to the promoter group, leaving behind a shell of related-party loans and disputed tax demands. The risk is structural: the company no longer has an operating undertaking, and the auditor has been unable to verify fixed assets or audit trails for half a decade. Watch whether the sale proceeds are deployed as stated and whether the zero-receivables position holds.