Fraser auditor flags Rs 6.81 crore unsupported balances

Fraser and Company Limited’s auditor issued a qualified conclusion on its September 30, 2026 limited review after it could not determine the financial-statement effect of Rs 6.81 crore across undocumented supplier advances, unconfirmed overdue receivables and long-outstanding payables.

What did Fraser's auditor qualify in the review?

Fraser’s auditor identified three balance categories for which it could not obtain sufficient and appropriate evidence in the standalone unaudited results for the quarter ended September 30, 2026. They were Rs 1.34 crore of trade receivables outstanding for more than 12 months, Rs 2.88 crore of trade payables outstanding for a long time, and Rs 2.59 crore of advances to certain suppliers.

The Rs 2.59 crore supplier advances had been made before the period ended December 2022, according to the limited-review report dated November 13, 2026. Management did not provide documents on the purpose of the advances, commitments against them or balance confirmations at the balance-sheet date. The auditor therefore said it could not ascertain their possible effect on the financial statements.

The engagement was a limited review under Standard on Review Engagements 2410, rather than an audit, for the quarter ended September 30, 2026. The auditor said the review primarily uses inquiries of company personnel and analytical procedures, provides less assurance than an audit, and does not result in an audit opinion.

Why are Fraser's receivables and payables unconfirmed?

Fraser had Rs 1.34 crore of trade receivables overdue by more than 12 months at the September 30, 2026 balance-sheet date, without confirmations from the counterparties. In the absence of evidence on recoverability and confirmation, the auditor said it could not comment on the extent to which the receivables could be recovered or on any resulting impact on the financial statements.

Management said it was following up with the relevant parties to recover the Rs 1.34 crore outstanding amount. That stated recovery effort does not resolve the issue identified in the review report, which was that confirmations were unavailable for the auditor’s verification at the balance-sheet date.

Trade payables of Rs 2.88 crore had remained outstanding for a substantial period, while Fraser did not provide balance confirmations or reconciliations. Management said it was engaging with the relevant parties to obtain confirmations and reconcile accounts, and intended to settle dues in phases based on funds availability and operational cash flows.

The review report also states that Fraser remains suspended from trading on the Calcutta Stock Exchange Limited as of November 13, 2026. The auditor did not quantify an accounting adjustment for the Rs 2.88 crore payable balance, but said the missing confirmations and reconciliations meant it could not ascertain the possible financial-statement effect.

What legal claims and settlements did Fraser disclose?

Five creditors had filed recovery suits against Fraser, with court notices from different courts covering Rs 2.99 crore of payables in the company’s books. The filing does not disclose the outcomes, hearing dates or whether the amounts claimed differ from the recorded payable balances, so Rs 2.99 crore is the book value covered by the notices.

Fraser’s financial-results notes say it entered full-and-final settlements with two of the five creditors for Rs 1.12 crore. The notes say Fraser paid Rs 95.2 lakh and wrote back the remaining Rs 16.7 lakh as other income in the statement of profit and loss for the period ended September 30, 2026.

The auditor’s emphasis-of-matter paragraph presents different figures for the same two settlements: Rs 1.42 crore in aggregate settlements and Rs 1.25 crore paid, with Rs 16.7 lakh waived and recognised as other income. Both disclosures report the same waiver, but the settlement and payment figures each differ by Rs 30 lakh; the filing does not explain the discrepancy.

What do Fraser's results and going-concern disclosure show?

Fraser reported total income from operations of Rs 35 lakh for the quarter ended September 30, 2026, compared with Rs 36 lakh in the quarter ended June 30, 2026. Profit after tax was Rs 2.2 lakh in the September quarter, compared with a loss after tax of Rs 28.4 lakh in the preceding quarter and a loss after tax of Rs 10 lakh in the quarter ended September 30, 2025.

For the half year ended September 30, 2026, Fraser reported a loss after tax of Rs 26.1 lakh, compared with a Rs 19.1 lakh loss in the corresponding half year of 2025. The half-year loss therefore increased by Rs 7 lakh despite the Rs 2.2 lakh profit reported in the September 2026 quarter. Fraser has one operating segment, supplying construction and real-estate-related materials.

Cash and cash equivalents were Rs 4.2 lakh on September 30, 2026, compared with Rs 20.4 lakh on March 31, 2026. The cash-flow statement reported Rs 25 lakh of net cash used in financing activities for the period, including net repayment of borrowings of Rs 24.7 lakh.

Fraser prepared its September 30, 2026 statements on a going-concern basis despite accumulated losses and a negative net current asset position. Management said it was optimistic about a revival in coming years, citing exits of residential projects and lower debt, while the filing says no adjustments were made to asset recoverability or liability classification that could be needed if Fraser could not continue as a going concern.

Conclusion

The qualified limited-review conclusion centres on Rs 6.81 crore of balances for which Fraser’s auditor lacked documents, confirmations or reconciliations. The matters span supplier advances made before December 2022, receivables overdue beyond 12 months and aged payables, while five creditor suits cover Rs 2.99 crore of book payables.

The next disclosures to watch are Fraser’s planned recovery of Rs 1.34 crore in receivables, phased settlement and reconciliation of Rs 2.88 crore in payables, and developments in the five recovery suits. Clarification of the Rs 30 lakh difference between the company-note and auditor-report settlement figures would also resolve an inconsistency disclosed for the September 30, 2026 period.