OM Galaxy auditor cannot quantify unprovided MSME interest

OM Galaxy Limited’s auditor could not quantify unprovided interest on delayed payments to suppliers registered under the Micro, Small and Medium Act, 2006, because payment-delay data was not readily available for verification. The qualification applies to the restated consolidated results, while trade payables to micro and small enterprises were Rs 17.097 crore at March 31, 2026.

What did OM Galaxy’s auditor qualify?

OM Galaxy’s auditor qualified the restated consolidated financial information because no provision had been made for interest payable on delayed and outstanding payments to registered MSME suppliers. Shetty Naik & Associates stated in its examination report dated August 20, 2026 that the data related to payment delays was not readily available for verification, preventing it from quantifying the effect on the profit and loss account for the respective years.

The report identifies an unprovided expense but does not disclose its amount. The auditors said the restated consolidated information for the years ended March 31, 2026 and March 31, 2025 incorporated retrospective adjustments for changes in accounting policies, material errors and regrouping or reclassifications, except for the qualification described in the report. The March 31, 2024 audit report, issued by the previous auditor on September 5, 2024, had no audit qualifications requiring adjustments.

The qualification does not establish that the full Rs 17.097 crore closing balance of MSME trade payables was delayed or subject to interest. The auditor’s stated limitation concerns data on the delay in payments to registered suppliers, rather than the reported year-end balance alone. The supplied financial information therefore does not support a calculation of an additional expense or a revised profit figure.

How large were OM Galaxy’s MSME supplier dues?

OM Galaxy reported Rs 17.097 crore of outstanding dues to micro and small enterprises at March 31, 2026, down from Rs 18.2543 crore at March 31, 2025 and Rs 17.6828 crore at March 31, 2024. The balance was part of total trade payables of Rs 37.3091 crore at March 31, 2026.

MSME dues accounted for about 46% of OM Galaxy’s March 2026 total trade payables, calculated from the Rs 17.097 crore MSME balance and Rs 37.3091 crore total. Between March 2025 and March 2026, MSME dues fell by Rs 1.1573 crore, while dues to creditors other than micro and small enterprises rose by Rs 9.7633 crore. That composition change does not quantify the qualification because the auditor did not provide invoice-level delay data.

OM Galaxy’s March 2026 balance sheet also recorded Rs 17.6324 crore of short-term borrowings, Rs 20.1566 crore of long-term borrowings and Rs 75.4278 crore of current liabilities. Those reported balances place MSME payables within the group’s broader current-liability position, but the auditor identified only unprovided interest on delayed registered-supplier payments as the basis for qualification.

Why can OM Galaxy’s MSME interest not be calculated?

OM Galaxy’s Rs 17.097 crore MSME payable balance cannot by itself establish unprovided interest because it records dues outstanding at March 31, 2026, not the duration of delay for individual payments. The auditor said delay data was not readily available for verification and therefore it could not quantify the impact on profit and loss for the respective years.

The source does not provide the payment or due dates for invoices, a breakdown of delayed invoices, or an interest provision. It would therefore be unsupported to treat every MSME payable as delayed, to apply an interest rate, or to equate the closing payable amount with the possible interest expense. The disclosed matter is an unquantified potential impact on reported results, not a stated liability equal to Rs 17.097 crore.

The three year-end MSME balances also cannot be used as a direct measure of changes in potential interest. OM Galaxy reported Rs 18.2543 crore at March 2025, compared with Rs 17.097 crore at March 2026, but the report does not disclose whether particular invoices were overdue, how long they remained unpaid, or whether they were settled during either year. A lower closing balance can therefore not determine a lower unprovided interest amount from the supplied information.

How could the qualification affect OM Galaxy’s reported earnings?

OM Galaxy reported consolidated profit before tax of Rs 22.3377 crore and profit for the year of Rs 16.6358 crore in FY2026, compared with Rs 21.6443 crore and Rs 15.9164 crore, respectively, in FY2025. Since the auditor said interest on delayed MSME supplier payments had not been provided, the reported expense and profit figures may exclude an amount that cannot be measured from the restated accounts.

Revenue from operations rose by Rs 11.3402 crore in FY2026 from FY2025, while profit for the year rose by Rs 0.7194 crore. However, the report does not say that the unprovided MSME interest was included in the Rs 2.6901 crore FY2026 finance-cost line. It instead says the company had not provided for that interest, so the finance-cost trend cannot be used to infer the missing amount.

The restated information covers OM Galaxy and two subsidiaries, OMG Auto Mould Private Limited and Infuse HRS Private Limited, for the three years through March 31, 2026. The examination report says Shetty Naik & Associates relied on another auditor’s reports for those two subsidiaries and that its opinion was not modified in respect of that matter. That reliance is separate from the MSME-interest qualification.

Conclusion

OM Galaxy’s auditor identified a defined but unmeasured reporting issue: interest on delayed payments to registered MSME suppliers had not been provided, and unavailable delay data prevented quantification. The Rs 17.097 crore MSME payable balance at March 31, 2026 shows the scale of the relevant creditor category, but it does not establish the amount of any omitted interest expense.

The next disclosed matter to watch is whether OM Galaxy later supplies payment-delay data or records an interest provision. The August 20, 2026 report says the auditor has no responsibility to update its report for events and circumstances occurring after that date, and the supplied material discloses no remediation plan, settlement schedule or quantified provision.