A2Z Infra Engineering auditor gives no Q2 review conclusion

A2Z Infra Engineering Limited received no review conclusion from its auditor on consolidated results for the quarter ended September 30, 2026, because evidence was insufficient on going concern and loan balances, including Rs 6.4848 crore of estimated unrecognised interest on non-performing asset borrowings at that date.

Why did A2Z Infra Engineering’s auditor give no Q2 review conclusion?

A2Z Infra Engineering’s auditor, MRKS and Associates, issued a disclaimer of conclusion on the consolidated unaudited financial results for the period ended September 30, 2026. In its report dated November 13, 2026, the auditor said it could not obtain sufficient appropriate evidence to provide a basis for a conclusion under Regulation 33 of the Securities and Exchange Board of India listing regulations.

A2Z Infra Engineering’s auditor said the matters identified were significant enough that it could not conclude whether anything had come to its attention suggesting the statement did not meet Indian Accounting Standard 34, Interim Financial Reporting, disclosure requirements or contained a material misstatement. The disclaimer does not state that the September 2026 results are misstated; it states that the auditor lacked evidence for a normal limited-review conclusion.

A2Z Infra Engineering had received similar reporting on earlier periods. The auditor said its audit report for the year ended March 31, 2026, dated July 14, 2026, and review reports for the quarters ended June 30, 2026 and September 30, 2025, dated August 12, 2026 and November 14, 2025, respectively, also included disclaimers relating to these matters.

What creates A2Z Infra Engineering’s going-concern uncertainty?

A2Z Infra Engineering faces a going-concern uncertainty because the auditor cited accumulated losses of Rs 1,076.8484 crore at September 30, 2026, substantial erosion of net worth and current liabilities exceeding current assets by Rs 59.7391 crore. The auditor also cited delayed repayments of borrowings and lender recovery applications before the Debt Recovery Tribunal.

A2Z Infra Engineering’s auditor reported a net loss after tax of Rs 25.05 lakh for the quarter ended September 30, 2026. A note in the financial-results material describes the same Rs 25.05 lakh loss as relating to the six months ended September 30, 2026, creating a difference in the stated period, while both disclosures place accumulated losses at September 30, 2026.

A2Z Infra Engineering’s management said it has entered into one-time settlement agreements with various lenders and is negotiating with remaining lenders over debt obligations. Management also said it was discussing immediate collections with certain customers and expected a substantial portion of trade receivables within the upcoming year, but the auditor said those collections within 12 months were uncertain without customer confirmations.

How much interest did A2Z Infra Engineering not recognise on NPA borrowings?

A2Z Infra Engineering did not recognise Rs 56.96 lakh of interest on non-performing asset, or NPA, borrowings for the quarter ended September 30, 2026, according to the auditor. Management estimated accumulated unrecognised interest at Rs 6.4848 crore at September 30, 2026, based on expected renegotiation with lenders.

A2Z Infra Engineering’s results note says certain banks had classified loan accounts as NPAs and had not charged interest on them, while the company had similarly not charged interest in its accounts. The note says this left interest costs and loan liabilities understated, with the precise amount still subject to determination and reconciliation with banks.

A2Z Infra Engineering’s Rs 56.96 lakh estimate for the September 2026 quarter was below Rs 287.47 lakh for the June 2026 quarter and Rs 246.19 lakh for the September 2025 quarter. However, the accumulated estimate increased from Rs 5.3366 crore at March 31, 2026 to Rs 6.4848 crore at September 30, 2026, an increase of Rs 1.1482 crore over six months.

What loan-balance adjustments could affect A2Z Infra Engineering’s results?

A2Z Infra Engineering’s auditor said lender confirmations and reconciliations were pending, preventing it from commenting on any adjustments needed to the carrying values of NPA borrowings and related dues. The potential adjustments include interest payable under loan agreements and settlement agreements, along with the consequent effect on the September 30, 2026 consolidated statement.

A2Z Infra Engineering’s management said it had completed one-time settlements with certain lenders or was discussing settlements with banks. In the standalone results note, management said it believed no additional liability would arise beyond the carrying value at September 30, 2026 from certain Debt Recovery Tribunal matters, but the auditor said it lacked sufficient evidence on debt settlements and availability of funds.

A2Z Infra Engineering also disclosed that two parties had filed recovery applications with the National Company Law Tribunal. The company said those disputed matters were sub judice, while lender recovery proceedings, repayment delays and NPA classification formed part of the auditor’s stated basis for questioning the going-concern assumption.

Does A2Z Infra Engineering have other disclosed uncertainties?

A2Z Infra Engineering’s auditor said management had identified a material uncertainty that may cast significant doubt on the Tanzania branch’s ability to continue as a going concern. This branch-level uncertainty was disclosed in note 9 to the consolidated statement for the period ended September 30, 2026, separately from the Holding Company’s funding and debt issues.

A2Z Infra Engineering’s consolidated statement included 10 subsidiaries with combined revenue of Rs 96.0824 crore and profit after tax of Rs 63.81 lakh for the quarter ended September 30, 2026. Those subsidiary financial statements were reviewed by other auditors, and MRKS and Associates said its report relied on their review reports and the procedures it performed.

A2Z Infra Engineering’s auditor also drew attention to disputes relating to three cogeneration power plants, where arbitral awards totalling Rs 72.3473 crore, plus interest, were passed against the company in 2021. The company had fully impaired the plants’ carrying value in earlier periods, and arbitration remained in progress after the Punjab and Haryana High Court appointed a sole arbitrator on December 5, 2025; the auditor did not modify its conclusion for this emphasis-of-matter disclosure.

Conclusion

A2Z Infra Engineering’s September 2026 consolidated results did not receive a normal limited-review conclusion because the auditor could not obtain sufficient evidence on going concern and NPA borrowing balances. The disclosed Rs 6.4848 crore accumulated unrecognised-interest estimate, Rs 59.7391 crore current-liability gap and Rs 1,076.8484 crore accumulated losses quantify parts of the uncertainty.

What to watch next is A2Z Infra Engineering’s disclosed plan to settle debt with lenders and recover a substantial portion of certain trade receivables within the upcoming year. Lender confirmations and reconciliations, along with unresolved Debt Recovery Tribunal and National Company Law Tribunal proceedings, will determine whether adjustments to borrowings, interest and liabilities are required.