Adroit Infotech’s record carries three clean-audit years, yet the auditor has been unable to confirm the repayment terms or overdue status of loans to subsidiaries for two years running, and the company is now seeking shareholder approval for inter-corporate and director-interested exposures. Revenue recognition has been flagged as a Key Audit Matter every year since FY2019, while trade receivables have grown from ₹4.53 crore in FY22 to ₹18.25 crore in FY26 with no provision for credit losses. A goodwill balance of ₹11.80 crore from the Verso Altima acquisition sits unimpaired even as standalone operations are loss-making.
Key findings
- Subsidiary loans carry no repayment schedule, and the auditor cannot confirm regularity
Major- The auditor reports under CARO clause (iii)(c) and (d) that no schedule of repayment or interest payment has been stipulated for loans granted, and the auditor is unable to comment on regularity or on overdue amounts beyond 90 days. The FY25 CARO report contained the same exception and stated that outstanding loans have not been demanded for repayment as on that date. The standalone balance sheet records a loan to a subsidiary of ₹4.11 crore as at 31 March 2026, up from ₹2 crore a year earlier. - Revenue recognition is a persistent Key Audit Matter, yet expected credit losses are zero
Major- The auditor has reported revenue recognition as a Key Audit Matter in every annual report from FY2019 through FY2026, citing significant judgement in performance obligations, principal-versus-agent determination, and cost estimates for fixed-price contracts. Despite consolidated trade receivables rising from ₹4.53 crore in FY22 to ₹18.25 crore in FY26, the allowance for lifetime expected credit loss was nil in every one of those years. Receivable days reached 137 in FY26 against a stated credit period of 60-120 days. - Consolidated goodwill of ₹11.80 crore sits unimpaired while standalone operations are loss-making
Major- Consolidated goodwill of ₹1,180.34 lakhs (₹11.80 crore) arose from the 1 April 2022 acquisition of Verso Altima India Private Limited, with no identifiable intangible assets acquired. The total purchase consideration to be transferred was Rs. 1,292.37 lakhs (₹12.92 crore). In FY23 and FY24, the Company assessed investments in subsidiaries at cost for impairment and stated confidence no impairment is required; in FY25 and FY26, the Group made this assessment and statement. Standalone PAT was a loss of ₹0.74 crore in FY26, while consolidated PAT was a profit of ₹3.30 crore, with 122% of consolidated PAT generated at subsidiaries. - Audit opinions are clean, but a daily-backup exception persisted for two years
Minor- The auditor’s report for FY26 states that the backup of books of account maintained in electronic mode has not been maintained on servers physically located in India on a daily basis. The same exception was reported in FY25. In FY25, the auditor was also unable to obtain any internal audit reports on a timely basis and therefore did not consider them except to the extent made available; the same limitation was recorded in FY24. - Overseas subsidiaries are repeatedly incorporated then closed before meaningful operations
Minor- Adroit Infotech US Inc., incorporated on 6 September 2022, was described as non-operational when the board resolved to initiate its closure on 22 July 2025. Adroit Infotech DMCC was listed as yet to commence operations for three consecutive years and was closed during FY24. As at 31 March 2026, one subsidiary was yet to commence operations. - Statutory auditor resigned mid-term in FY22; internal auditor changed twice in two years
Minor- M/s. Niranjan & Narayan, appointed for a five-year term at the 29th AGM on 30 September 2019, resigned on 23 June 2022 and were replaced by M/s. Rao & Shyam to fill the casual vacancy. M/s. P R Chandra & Co served as internal auditor for FY21 and FY24 and resigned on 22 July 2025; their successor, Mr. Ravi Daryavesh, resigned on 13 June 2026 and was replaced by Mr. Thirumareddy Praveen Kumar for FY27. - Operating cash flow is volatile, and cumulative CFO covers only 66% of cumulative EBITDA
Minor- Consolidated CFO swung from a negative ₹1.14 crore in FY25 to a positive ₹12.28 crore in FY26, while PAT was ₹0.69 crore and ₹3.30 crore respectively. Cumulative CFO of ₹32 crore covered 66% of cumulative EBITDA of ₹48 crore over the ten-year window. Consolidated capital work-in-progress and intangible assets under development totalling ₹6.42 crore were aged more than three years as of 31 March 2025.
What to watch
- AGM special resolutions. Outcome of the 36th AGM (notice dated 20 July 2026) on the ₹100 crore Section 186 limit, ₹50 crore Section 185 limit, material RPT approval, and ESOP trust funding.
- Revenue recognition and credit losses. Whether the FY27 annual report again carries revenue recognition as a Key Audit Matter and whether any expected credit loss allowance is recorded against the ₹18.25 crore trade receivables balance.
- Subsidiary loan terms. Whether the FY27 CARO report discloses that repayment and interest terms have been stipulated for loans to subsidiaries that currently have none (D1 period FY2025-26).
- Goodwill and intangible impairment. Impairment testing of the ₹11.80 crore consolidated goodwill at the next reporting date, given the subsidiary’s ability to generate the projected positive cash flows (D1 period ended 31 March 2026).
- Daily-backup exception. Whether the FY27 annual report confirms the daily-backup-on-India-servers exception is resolved or repeats for a third consecutive year (D1 period FY2025-26).
Bottom line: This is a disclosed and audited record with three years of unqualified opinions and a consolidated profit. The weight sits in three places: subsidiary loans the auditor cannot verify, a four-year receivables build with no provision, and an unimpaired goodwill balance that depends entirely on future subsidiary cash flows while the standalone entity loses money. Watch the AGM resolutions and the next CARO report for whether terms are finally set on those loans.