Ajax Engineering Ltd Forensic Report - SOIC x StockScans Report

as of Sep 2026

Ajax Engineering's FY2025-26 record carries two unqualified audit opinions, but the clean certificate sits alongside a qualified governance sign-off and a recurring electronic-records control gap. The company's own disclosures also show a small related-party transaction that bypassed the Audit Committee, rapid turnover in the CFO chair, and a large nil-priced ESOP grant to the MD & CEO.

Key findings

  1. A ₹40 lakh related-party deal bypassed the Audit Committee, forcing a qualified governance certificate Major - A transaction with a director's relative worth ₹40,00,000 was entered without prior Audit Committee approval and ratified on May 18, 2026 as a one-time exception. The governance certificate from BMP & Co. LLP is qualified on this lapse, and the company admits non-compliance with Regulation 23(2). No other material related-party dealings, loans, or guarantees were reported.
  2. Clean audit opinions, but the same electronic-records gap flagged two years running Major - S.R. Batliboi & Associates issued unqualified opinions for both FY2025-26 and FY2024-25. In both years, the auditor reported under Rule 11(g) that the audit trail was not enabled throughout the year in the dealer/customer management software, and that no India-located server held daily backups for it. Management plans to enable audit trails with a migration to SAP S/4HANA and AJAX One scheduled for 2026-27.
  3. Promoter-controlled board oversaw rapid CFO turnover and a nil-priced 0.11 crore-option grant to the MD & CEO Major - Three CFOs held the role in nine months: Mr. Tuhin Basu resigned effective September 30, 2025, Mr. Ganesh B J was interim CFO from December 31, 2025 and resigned effective June 02, 2026, and Mr. Ketan Pendse was appointed the same day. The MD & CEO, Shubhabrata Saha, was granted 1,144,068 options under Scheme II at a nil exercise price, a grant exceeding 1% of issued capital. In the postal ballot on ESOP 2024, Public Institutions voted 24.77% against, while Promoters voted 100% in favour.
  4. Customs duty demand grows to ₹18.82 crore; KIADB land cost demand of ₹7.96 crore is unresolved Minor - Customs authorities demanded ₹18.82 crore in additional basic customs duty for FY2011-12 to FY2025-26, up from ₹16.84 crore, with an appeal filed. KIADB demanded an additional ₹7.96 crore for leasehold land, and management says it cannot estimate the incremental amount. Amounts paid under protest for customs, excise and state tax matters rose to ₹14.56 crore.
  5. "Debt-free" claim sits alongside sanctioned working-capital borrowings and pledged deposits Minor - The annual report calls the company "debt-free", yet the financial statements disclose an SBI working capital demand loan of ₹4.95 crore, unsecured loans from ICICI, Kotak, and Citi banks, and ₹30 crore in undrawn committed facilities. Non-current bank deposits of ₹3.19 crore are held as margin money, and investments were marked as lien in favour of SBI. The company states it has not defaulted on any interest payable.
  6. Revenue is stable, but receivables are stretching and credit-impaired balances nearly doubled Minor - Revenue was ₹2,111 crore in the latest period, against ₹2,103 crore in FY2025-26. Credit-impaired trade receivables rose from 6.38 crore to 11.45 crore, and the Trade Receivable Turnover Ratio fell 25% from 16.40 to 12.24 as the company extended credit. Receivables are secured by bank guarantees and letters of credit.
  7. Two small FEMA penalties paid; one Listing Regulations non-compliance disclosed Minor - RBI levied a ₹0.02 crore compounding penalty for delayed reporting of a 2009 bonus share allotment to Fiori S.p.A., and a separate ₹2,20,250 penalty for FEMA contraventions, both paid. The company also disclosed its single non-compliance with Regulation 23(2) for the ₹40,00,000 related-party transaction. No penalties from stock exchanges or SEBI were reported in the last three years.
  8. Operating cash flow swung from 0.16x to 1.68x PAT; dividends skipped again, CWIP aged Minor - Cash flow from operations rose from ₹42.72 crore in FY25 to ₹377 crore in FY26, against PAT of ₹260 crore and ₹225 crore respectively. No dividend was recommended for a second straight year, citing growth-stage funding needs. Capital work-in-progress totalled ₹199.40 crore, with ₹146.90 crore aged 1-2 years.
  9. Reported profit is shaped by disclosed, regulatory-driven items Clean - The company booked a ₹3.1 crore gratuity liability increase from the Labour Codes as an exceptional item. It elected the section 115BAA tax option, and the CEV-IV to CEV-V emission transition added over 400 basis points to direct material cost. No transfers between fair value hierarchy levels were reported.

What to watch

Bottom line: This is a disclosed and audited record with a clean statutory opinion, but the governance layer carries the weight: a qualified certificate, a ratified-after-the-fact related-party deal, rapid CFO turnover, and a large nil-priced grant to the CEO. The financial risk is more contained, receivables are stretching and customs demands are growing, but they are secured, disclosed, and contested. Watch the audit trail fix and the customs appeal, and read the receivables line with the credit extension in mind.