Maha Rashtra Apex auditor flags Rs 4.06 crore liability gap

Maha Rashtra Apex Corporation Limited had not provided Rs 4.06 crore of delayed-period interest on deposits from October 2019 through September 2026, causing profit to be overstated and liabilities to be understated, according to its auditor’s qualified limited-review conclusion for the half year ended 30 September 2026.

Why did Maha Rashtra Apex receive a qualified conclusion?

Maha Rashtra Apex received a qualified conclusion because it did not recognise interest costs related to delayed deposit payments. H G Sarvaiya and Co. identified an unprovided interest cost of Rs 12.15 lakh for the quarter ended 30 September 2026 and Rs 24.21 lakh for the half year ended that date.

The cumulative interest cost not provided between October 2019 and September 2026 was Rs 4.06 crore. The auditor stated that, to this extent, Maha Rashtra Apex’s profit was overstated and its liability was understated in the unaudited standalone financial results submitted under Regulation 33 of the Securities and Exchange Board of India’s Listing Obligations and Disclosure Requirements Regulations, 2015.

The same qualification appeared in the consolidated limited-review report for the quarter and half year ended 30 September 2026. In that report, the auditor drew attention to the standalone financial statements and repeated the Rs 4.06 crore cumulative omission, linking the consolidated qualification to the unprovided deposit interest at Maha Rashtra Apex.

How much delayed-deposit interest did Maha Rashtra Apex not provide?

Maha Rashtra Apex did not provide Rs 12.15 lakh of delayed-period interest for the September 2026 quarter, Rs 24.21 lakh for the April-to-September 2026 half year, and Rs 4.06 crore cumulatively from October 2019. The half-year amount covers two quarters, while the cumulative figure spans nearly seven years.

The filing does not give a restated standalone profit figure after recognition of the Rs 24.21 lakh half-year charge or the Rs 4.06 crore cumulative charge. It instead specifies the accounting effect: reported profit is higher and liabilities are lower by the interest cost that has not been recognised.

The auditor conducted a review under Standard on Review Engagements 2410, which provides moderate assurance through inquiries and analytical procedures. The report says no full audit was performed for the September 2026 interim results, and therefore the auditor did not express an audit opinion.

What public-deposit amounts remain outstanding at Maha Rashtra Apex?

Maha Rashtra Apex disclosed Rs 13.68 crore of principal and accrued interest payable to the public as outstanding at the reporting date. Under a scheme sanctioned by the High Court of Karnataka on 8 October 2004, deposits and bonds were required to be repaid by 15 June 2009 or 15 September 2009.

During financial year 2023-24, Maha Rashtra Apex deposited Rs 13.96 crore with the High Court of Karnataka. The filing does not explain how that deposit relates to the Rs 13.68 crore reported as outstanding, whether money has been disbursed to depositors, or the amount of any balance still held by the court.

The public-deposit matter was included in an emphasis-of-matter paragraph rather than as a separate basis for qualification. The auditor said its conclusion was not modified for this matter, distinguishing it from the delayed-interest provision that resulted in the qualified conclusion for the half year ended 30 September 2026.

What other matters did the auditor highlight?

Maha Rashtra Apex’s certificate of registration to operate as a non-banking financial company was cancelled by the Reserve Bank of India on 13 June 2002. The auditor listed the cancellation as an emphasis-of-matter item in the September 2026 review and said it did not modify the review conclusion.

Maha Rashtra Apex entered into an agreement to sell property to Kanara Consumer Products Ltd., formerly Kurlon Limited, and had credited Rs 12.73 crore under that agreement by 30 September 2026. The auditor said the time stipulated in the agreement had lapsed, while the filing did not disclose a revised completion date or the next step for the transaction.

The consolidated review covered three subsidiaries and three associates. For the period ended 30 September 2026, the subsidiaries reported total assets of Rs 9.17 crore, revenue of Rs 20.36 lakh and total comprehensive income of Rs 31.12 lakh, based on financial results reviewed by other auditors.

The group’s share of loss from its three associates was Rs 7.94 crore for the six months ended 30 September 2026. That associate loss is separate from the Rs 4.06 crore delayed-interest provision: the former was included in consolidated results, while the latter was identified in Maha Rashtra Apex’s standalone deposit-interest accounting.

How did Maha Rashtra Apex’s latest results compare with last year?

Maha Rashtra Apex reported a consolidated loss attributable to owners of Rs 6.72 crore for the six months ended 30 September 2026, compared with a loss of Rs 6.82 crore in the corresponding 2025 half year. Total comprehensive loss attributable to owners narrowed to Rs 5.75 crore from Rs 6.62 crore over the same periods.

The group’s share of loss from associates improved to Rs 7.94 crore in the September 2026 half year from Rs 8.07 crore a year earlier. Consolidated total income increased to Rs 2.04 crore from Rs 1.92 crore, while total expenses increased to Rs 1.22 crore from Rs 1.01 crore.

For the quarter ended 30 September 2026, the consolidated loss attributable to owners was Rs 10.19 crore, compared with a loss of Rs 30.69 crore in the quarter ended 30 September 2025. The latest quarter included a Rs 10.34 crore share of loss from associates, against Rs 30.54 crore in the prior-year quarter.

Conclusion

Maha Rashtra Apex’s September 2026 limited review identifies a specific accounting omission: Rs 4.06 crore of delayed-period deposit interest was not provided between October 2019 and September 2026. The auditor said this overstated profit and understated liabilities, alongside emphasis-of-matter disclosures covering Rs 13.68 crore payable to the public and the expired timeline for a Rs 12.73 crore property-sale agreement.

The next disclosures to watch are whether Maha Rashtra Apex recognises the Rs 4.06 crore cumulative interest cost, clarifies the application of the Rs 13.96 crore deposited with the High Court in financial year 2023-24, and updates the property-sale agreement. The September 2026 filing gives no revised deadline for that sale and no restated result reflecting the delayed-interest provision.