Priya adverse opinion flags Rs 29.0198 crore NPA interest

Priya Limited received an adverse opinion on its standalone results for the quarter and six months ended September 30, 2026, because J M & Associates could not verify Rs 29.0198 crore of interest payable on non-performing asset borrowings, saying finance costs and borrowings may be materially misstated.

Why did Priya receive an adverse auditor opinion?

Priya received the adverse opinion because the reviewer lacked sufficient and appropriate evidence to test interest provisions and borrowing balances on non-performing asset, or NPA, accounts at September 30, 2026. Priya did not provide bank statements for these accounts or confirmations from lenders on interest rates, penal interest and the calculation of the charges.

The reviewer said the limitation affected both the Rs 1.3816 crore of notional interest recognised in the September 2026 quarter and interest provided in earlier years. Because the matter was material and pervasive, J M & Associates said the financial statements may be materially misstated in respect of finance costs and borrowings.

Priya accounted for the interest using internal estimates rather than lender statements and balance confirmations. The report does not put a number on the potential correction, as the absent records prevent an independent calculation of the applicable interest rate, penal charges and closing liability.

How much NPA interest and related exposure did Priya report?

Priya reported Rs 29.0198 crore of cumulative interest payable on NPA borrowings as of September 30, 2026, including the Rs 1.3816 crore booked during the latest quarter. The reported liability is therefore not confirmed by the respective lenders, and the auditor could not assess its accuracy or completeness.

The unavailable NPA bank records also affected other reported balances. Priya showed Rs 47.58 lakh of advance-tax refunds receivable across nine assessment years, although income-tax records indicated the refunds had been made; without the relevant bank statements, the company could not establish the amounts actually received or the closing balance of advance taxes and loans.

Priya had also made an aggregate expected credit loss provision of Rs 32.6964 crore for doubtful export debtors at September 30, 2026. Management had not approached the Reserve Bank of India, or RBI, and the Foreign Exchange Management Act, or FEMA, authorities for approval to write off that amount, so the reviewer could not comment on possible penalties or the effect on profit, loss or net worth.

What did Priya report for the September 2026 period?

Priya reported a net loss of Rs 1.4757 crore for the six months ended September 30, 2026, while the loss for the September quarter was Rs 55.92 lakh. The six-month loss exceeded the latest quarterly loss by Rs 91.65 lakh, indicating losses also recorded in the April-to-June 2026 quarter.

For the quarter ended September 30, 2026, Priya reported total income of Rs 2,000 and total expenditure of Rs 55.94 lakh, resulting in a loss of Rs 55.92 lakh before and after exceptional items. The audit-qualification statement said revenue from operations was nil in the current period because the company’s bank accounts were blocked.

Priya reported total assets of Rs 1.4351 crore and total liabilities of Rs 47.5503 crore at September 30, 2026, leaving negative net worth of Rs 46.1152 crore. The reviewer said accumulated losses exceeded net worth, but stated that the evidence obtained supported management’s use of the going-concern basis of accounting.

Priya’s disclosed primary segment is trading of electronics, computer peripherals and systems. During financial year 2020-21, it closed all branches other than Mumbai, sold or wrote off fixed assets at closed locations, and laid off most employees after business operations became nil.

What lender and property matters remain unresolved for Priya?

Priya said properties in Mumbai, Kolkata and Chennai were auctioned following non-payment of dues, but information on the auction proceeds from banks remained unavailable as of September 30, 2026. The company said the accounting adjustment between outstanding borrowings and the value of assets sold was made in the previous year, while the missing proceeds remain relevant to lender-balance reconciliation.

Indian Bank auctioned properties of Brent Properties Investment Pvt. Ltd. and Cheshire Properties Investment Pvt. Ltd., invoked under corporate guarantees, for Rs 4.56 crore each in financial year 2024-25. Priya also said Indian Bank auctioned its collateral-security properties for Rs 9.03 crore in the previous year, with the company becoming aware of the transactions through Form 26AS statements.

Indian Bank, Bank of Maharashtra and Union Bank of India have declared Priya, its promoters, directors and corporate guarantors as willful defaulters, according to the filing. Management has represented against those declarations, and Priya said it had received summons from the Debts Recovery Tribunal, or DRT, in Mumbai initiated by all three lender banks.

What steps has Priya disclosed to settle lender dues?

Priya disclosed a proposed one-time settlement, or OTS, of Rs 22.81 crore with Indian Bank, including expected realisations from auctioned properties. It had previously deposited Rs 1.75 crore in a non-lien account, and its directors remitted a further Rs 39.46 lakh during the quarter ended September 30, 2026 after a bank demand intended to facilitate the OTS process.

Management is evaluating options to revive Priya, but the filing gives no operating-revenue target, funding plan or timetable. The reported position combines the proposed Rs 22.81 crore settlement with nil operating revenue, negative net worth of Rs 46.1152 crore and the inability to validate material interest and borrowing balances.

Priya also had unpaid gratuity of Rs 67.60 lakh at September 30, 2026 because funds were unavailable. The reviewer noted that the chief financial officer position had been vacant since December 1, 2022, and that Priya had not appointed a replacement within the prescribed six-month period.

How could related-party insolvencies affect Priya?

The reviewer said the corporate insolvency resolution process, or CIRP, involving two related parties may affect Priya’s financial position and future transactions with them. VXL Instruments Limited entered CIRP on November 26, 2024, while VXL Software Solutions Pvt. Ltd. entered CIRP on February 26, 2025.

The filing does not quantify Priya’s exposure to either entity or identify a resulting financial adjustment as of September 30, 2026. That uncertainty sits alongside the Rs 32.6964 crore doubtful-debt provision for export sales and the auditor’s inability to comment on possible consequences of the unapproved write-off process.

Conclusion

Priya’s adverse opinion is centred on the inability to independently confirm Rs 29.0198 crore of NPA interest payable, including Rs 1.3816 crore recognised in the September 2026 quarter. The issue affects finance costs and borrowings against a backdrop of a Rs 1.4757 crore six-month loss, nil operating revenue and negative net worth of Rs 46.1152 crore.

The next disclosed matter to watch is the proposed Rs 22.81 crore OTS with Indian Bank after deposits of Rs 1.75 crore and Rs 39.46 lakh. Updates on bank confirmations, auction proceeds, the appointment of a chief financial officer and management’s challenge to the willful-defaulter declarations would indicate whether the reported balances and lender issues can be resolved.