Micropro Software Solutions' record shows three years of clean audit opinions, but those opinions sit alongside unverifiable fixed-asset records, overdue interest on loans, and an interest coverage ratio of -9.3x in FY26. The statutory auditor resigned barely a year into a five-year term, and the company's only subsidiary, acquired in September 2024, has already accumulated negative net worth. Revenue quality is undermined by a disputed receivable carried unprovided for three years, while operating cash flow has been persistently negative against reported profits.
Key findings
- Clean audit opinions mask deterioration, unverifiable assets, and -9.3x interest coverage
Major- The auditor issued unqualified opinions for FY2024-FY2026, with Key Audit Matters described in each year: Revenue Recognition for FY2025 and FY2026, and IPO Expenses for FY2024. For FY2026, fixed-asset records were "not been produced for verification," the same limitation was reported for FY2025, and no physical verification was conducted in FY2024. Interest coverage fell to -9.3x in FY26 with a PAT of ₹-1.29 crore, yet the auditor saw no material going-concern uncertainty. - Statutory auditor resigned mid-term in December 2025, a year into a five-year term
Major- Banthia Damani & Associates resigned effective after the half year ended September 30, 2025, citing "pre-occupation," with no professional disagreement stated. The Board appointed Anu Bajaj & Associates on 04.12.2025, approved at an EGM on 30.12.2025. The FY2025-26 audit report notes the incoming auditor "has taken into consideration the issues, objections or concerns raised by the outgoing auditors". - Sole UAE subsidiary has negative net worth and contradictory profit signals
Major- Microsync Information Technology Co. LLC, acquired on 10.09.2024 for ₹72.46 lakh, was newly incorporated with nil turnover. For FY25, it reported net assets of ₹-21.44 lakh and a net loss of ₹80.05 lakh. Consolidated PAT for FY26 of ₹-1.29 crore was better than standalone PAT of ₹-2.32 crore, indicating the subsidiary contributed positive profit of approximately ₹1 crore despite its reported FY25 net loss. - FY26 related-party loan statement does not contradict FY25 CARO finding
Major- The FY2024-25 CARO report stated the company gave an interest-free advance in the nature of a loan to its 100% subsidiary with no repayment schedule. The FY2025-26 standalone statements state the company had not granted loans to promoters, directors, KMPs and related parties repayable on demand or without terms. The subsidiary is listed as a related party in the FY26 RPT disclosure, and the FY25 CARO finding specifically identified the subsidiary as the recipient of the advance. - Disputed Botswana receivable carried unprovided for three years; receivables turnover deteriorating
Major- A 2.93 crore receivable from Sidilega Private Hospital, Botswana, has been carried with no provision for three years, with a legal notice sent in FY2024-25. The auditor flagged revenue recognition as a key audit matter, citing risk of misstatement in the appropriate period. Receivables turnover declined 37.26% to 1.57 in FY2023-24. - Operating cash flow negative against profits; IPO and placement proceeds not fully used
Major- Cumulative operating cash flow was ₹-4 crore against cumulative operating profit of ₹5 crore over FY24-FY26. FY24 CFO was ₹-7.14 crore against PAT of ₹3.11 crore. IPO funds were partly utilised with the balance in bank, and private placement funds were "NOT utilised for purposes for which raised" and kept in fixed deposits. - Losses absorbed by reserves; no leave encashment provision; IPO expenses set off against premium
Major- FY2026 and FY2025 losses were adjusted against General Reserves. The company does not provide for leave encashment, as stated in both FY2025-26 and FY2024-25 reports. IPO expenses of ₹4.64 crore were adjusted against securities premium of ₹28.47 crore. - Management concluded no impairment on assets for four straight years despite losses
Major- Management stated no impairment on PPE or intangible assets was necessary in FY2026, FY2025, FY2024, and FY2023, with recoverable value exceeding carrying value. This conclusion held even as consolidated PAT turned negative in FY26.
What to watch
- Outgoing auditor's issues. Whether Banthia Damani & Associates raised any concerns that the incoming auditor considered, per CARO clause 18 of the FY2025-26 report.
- Botswana recovery. Outcome of legal proceedings against Sidilega Private Hospital and any provision in FY2026-27 results.
- Overdue loan interest. The FY2026 audit flags overdue interest from two companies, any recovery, write-off, or restructuring will appear in the FY2026-27 report.
Bottom line: This is a record of clean audit opinions that do not match the underlying numbers, unverifiable assets, negative interest coverage, a mid-term auditor resignation, and a subsidiary whose reported losses contradict the consolidated picture. The risk is that the financial statements have been presented as healthier than the evidence supports. Watch the FY2026-27 audit for whether the new auditor tests the going-concern assumption, the subsidiary's turnaround, and the disputed Botswana receivable.