Supreme Infrastructure auditors estimate earnings and net worth overstatement at about 3 billion rupees

Key Facts

Auditors estimated that the treatment of accrued interest overstated Supreme Infrastructure India’s earnings and net worth by 300,242.66 lakh rupees, or about 3 billion rupees, for the year ended March 31, 2026. The company’s annual report said the same amount increased reported earnings for the year and net worth at the closing date. The qualification relates to the reversal of interest due to three lenders, without recording interest on the amount reversed. The auditors considered the failure to accrue that interest inconsistent with the principles of Indian Accounting Standard Ind AS 109. This treatment limits the interpretation of the earnings and net worth reported in the annual accounts.

The auditors said the company reversed interest of 278,805.87 lakh rupees during the year relating to three lenders, but had not obtained final discharge certificates from them when preparing the report. They added that the company did not accrue interest of 21,436.79 lakh rupees on the interest amount reversed for the year ended March 31, 2026. The report linked this gap directly to the accounting qualification, saying the failure to accrue the interest was inconsistent with the principles of Ind AS 109. The total overstatement of earnings and net worth estimated by the auditors was 300,242.66 lakh rupees. The impact of the matter therefore exceeded the value of the interest reversed alone, according to figures in the annual report.

The report showed the company’s reported net worth at 23,723.24 lakh rupees on March 31, 2026. But the auditors said net worth would have been negative 276,519.42 lakh rupees after accounting for the impact of the matter set out in the basis for their modified opinion. The difference means the qualification affects the picture of the financial position at year-end, as well as earnings. The report gave both figures as reported net worth and net worth after taking into account the impact of the specific matter in the basis for the modified opinion. These figures do not relate to September-quarter results, but to the financial year ended March 2026.

In assessing the company’s ability to continue operating, the auditors cited accumulated losses of 99,402.93 lakh rupees on March 31, 2026. They said these conditions indicate a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern. This places their qualification on the interest treatment alongside other indicators of the company’s financial position cited in the report. The report did not describe the going-concern status as settled, but linked it to management’s assessment and the conditions on which it was based. This qualification remains part of the reading of the annual accounts for the period ended in March.

Management, for its part, said the use of the going-concern basis of accounting remains appropriate. It cited partial implementation of the settlement scheme and the exit of most financial creditors, as well as business continuity and growth prospects. Management said, "The going-concern basis of accounting is appropriate." The report thus presents two positions on going concern: the auditors’ qualification against the backdrop of uncertainty and accumulated losses, and management’s assessment, which takes into account implementation of the settlement scheme and the exit of most financial creditors. This information relates to the year ended March 31, 2026.