Systematix Corporate Services Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

Systematix Corporate Services' record carries seven consecutive unqualified audit opinions, but the clean opinions sit alongside recurring audit limitations: the auditor has repeatedly been unable to comment on repayment of demand loans without stipulated schedules, and related-party loans dominate the loan book with no repayment terms. Operating cash flow has been negative in three of the last four years while dividends continued, and a subsidiary lost its SEBI registration over NSEL paired-contract violations.

Key findings

  1. Related-party loans dominate the loan book, with no repayment schedules Major - As at 31 March 2026, loans to related parties NHI Developers LLP (16.22 crore) and Swaraj Appartments P Ltd (₹7.50 lakhs) totalled 16.29 crore, 83.62% of total loans and advances in the nature of loans. The CARO report for FY 2025-26 states no repayment schedule has been stipulated, and the auditor is unable to comment on regularity of repayment or overdue amounts. The Board's Report for FY 2025-26 states no significant material related-party transactions occurred and Form AOC-2 disclosure was not required.
  2. Clean audit opinions, but the auditor repeatedly cannot comment on loan repayment Major - Shah & Taparia issued unqualified standalone and consolidated opinions for FY2025-26, dated April 29, 2026, each including a Key Audit Matter on Revenue from Operations. The standalone CARO reports for FY2025-26, FY2024-25, and FY2022-23 each state the auditor is unable to comment on repayment regularity of loans without stipulated schedules. The consolidated audit for FY2025-26 relied on other auditors for five subsidiaries with total assets of ₹276.16 crore, and the share of net loss of ₹1.56 lakh from one joint venture was certified by management, not audited.
  3. Operating cash flow negative in three of four years while dividends continued Major - Standalone CFO was ₹-8.05 Cr in FY26, ₹-20.13 Cr in FY25, and ₹-15.41 Cr in FY23, against PAT of ₹13.84 Cr, ₹45.76 Cr, and ₹5.08 Cr respectively. The Board recommended a final dividend of ₹0.10 per share for FY2026 on April 29, 2026, the same rate as the prior year, despite PBT falling 60% to ₹22.71 Cr from ₹57.09 Cr. FY26 ROCE was 8.15%, down from 19.14% in FY25 and 40.96% in FY24.
  4. Borrowings understate economic obligations: a group company's property secures a term loan Major - A term loan from Yes Bank is secured against a residential house property owned by Goldflag Exports Private Limited, a Group Company, disclosed in every annual report from FY2019-20 through FY2025-26. A fixed deposit of ₹66.95 crore created from preferential-allotment funds "will not be utilized for any other object". Of 103.12 crore proposed from the November 14, 2024 preferential allotment, only 42.12 crore had been utilised as of March 31, 2026.
  5. A subsidiary lost its SEBI registration over NSEL violations; another was struck off Major - SEBI cancelled the registration of Systematix Commodities Services Private Limited on December 27, 2023, for alleged violations in dealing in paired contracts on the National Spot Exchange Limited. The Enforcement Directorate's provisional attachment order dated August 7, 2023 on brokerage from NSEL transactions was confirmed by the Adjudicating Authority under PMLA on January 30, 2024. Divisha Alternative Investments LLP was struck off from the Register of LLP on July 21, 2026, ceasing to be a subsidiary from that date.
  6. Promoter family holds all executive roles; pay rises sharply as employee pay falls Minor - Mr. Nikhil Khandelwal, his mother Mrs. Anju Khandelwal, and his wife Mrs. Priyanka Khandelwal are all Directors, with no other directors related. Average managerial remuneration rose 183.33% in FY2021-22 and 65.92% in FY2025-26, while average employee remuneration (excluding managerial) fell 24.92% in FY2023-24 and 21.77% in FY2024-25. At the AGM on September 26, 2024, resolutions to increase both Mr. Nikhil Khandelwal's and Mrs. Priyanka Khandelwal's remuneration passed with the Promoter and Promoter Group voting all shares in favour.
  7. A persistent "port services" credit-risk disclosure that does not match the business Minor - The FY2019-20 standalone financial statements describe credit risk as concentrated in a limited customer group due to "port services provided by the Company," despite the company being a merchant banker with a single operating segment. The same disclosure repeats in the FY2022-23 and FY2023-24 statements. Fees income fell to 3.59 crore in FY2020 from 7.19 crore in FY2019, a decline of approximately 50%.
  8. A single ₹7 lakh SEBI penalty in 2024, otherwise a clean regulatory record Minor - SEBI imposed a monetary penalty of ₹7,00,000 on June 28, 2024, for not exercising due care as a Merchant Banker in respect of one IPO object, failure to maintain a separate SDD, and failure to make 50 status updates in the SI portal. The company paid the penalty on July 09, 2024. Corporate Governance reports from FY2019-20 through FY2024-25 each state no other penalties or strictures were imposed by stock exchanges, SEBI, or any statutory authority.
  9. Contingent liabilities limited to routine tax appeals and one disclosed guarantee Clean - Contingent liabilities include income tax demands contested in appeals for AY 2012-13 through AY 2017-18, ranging from ₹2.63 lakhs to 1.56 crore. The company issued a ₹30 crore corporate guarantee to ICICI Bank for subsidiary Systematix Shares and Stocks (India) Limited, also secured by promoter personal guarantees. No insolvency proceedings were pending against the company in any year from FY2022-23 through FY2025-26.

What to watch

Bottom line: This is an audited record with clean opinions, but the clean opinions carry recurring limitations the reader should weigh. The core risk is cash: operating cash flow has diverged from reported profit for three of four years, dividends have been maintained through that divergence, and the loan book is dominated by related parties with no repayment schedules. The regulatory history at the subsidiary level, a cancelled SEBI registration and a confirmed PMLA attachment, is the other matter to hold in mind. Watch the preferential-issue utilisation and the auditor transition named above.